Dark Clouds and Silver Linings

January 20, 2026 By Mike Veseth in Unified Wine & Grape Symposium, wine, wine history, wine markets Leave a comment

I have been busy getting ready for next week’s “State of the Industry” session at the Unified Wine & Grape Symposium in Sacramento. The theme of the Unified in 2026 is “Reframe the Narrative.” There was a lot of bad news about the wine business in 2025. Where are we headed in 2026 and beyond? How can we get out of this rut?

This is my 15th consecutive year on this panel and I thought it would be interesting to look back at my first presentation, which was in 2012. It took some fiddling to find the files, but here are the slides I presented back then along with my unedited and very rough presentation notes.

If you take a few minutes to read through this material, you’ll notice that while the wine business environment was very different back in 2012 in terms of the headlines, many of the detailed concerns were similar to today. Margins were tight then, for example, and tight now, too, but for very different reasons.

Economics is called the dismal science, so I suppose that dark clouds and silver linings are always on the cards. The more things change the more they stay the same in that regard. I think my final point (Boulding’s Law) has held up pretty well, don’t you? Here’s my 2012 report.

The State of the Wine Industry 2012: A Global Perspective

I study globalization and wine so I am here today to start off this session with a global perspective on the state of the industry.

Wine has always been a global industry, or as global as trade barriers and transportation costs allowed.

It is not an accident that when David Ricardo wrote his economics textbook almost 300 years ago, the example he used to illustrate international trade was the wine trade.

It has always been important to have a global perspective on wine but now more than ever. The wine world has become a tight little world where international and global effects cannot be ignored.

Today’s session will have a good deal of good news — a lot more than in some recent years. As an economist, however, it is my job to channel Alan Greenspan back when he warned about the dangers of “irrational exuberance.”

Silver linings do not always come wrapped in dark clouds, but sometimes they do. And it is important to understand them and to think strategically about them.

A Dangerous Phase

One silver lining is growth. The US economy should continue to grow in 2012, although perhaps more slowly than in 2011. And the wine market should continue to recover.

But the dark cloud that surrounds this is the global economy, which has entered a “Dangerous Phase” according to the International Monetary Fund. The global economy will grow this year but more slowly than before and with the largest single economic area — the European Union — likely falling into recession.

GLOBAL GROWTH SQUEEZE

And so economic leaders will be desperately looking for growth … and where will they find it? Consumers do not seem able to carry the load, especially with the housing crisis still unresolved.

Business investment is also inadequate due to poor future expectations and tight credit market conditions.

Government is handcuffed by its own debt and politically gridlocked as well.

So this leaves exports and we can expect nations to push for every competitive advantage for their products to try to grab the growth they need.

EXCHANGE RATES

This explains why exchange rates will be especially volatile in 2012. The US has successfully run a secret “weak dollar” policy for the past few years and now other countries are following suit. Competitive depreciations or currency wars are likely as more countries try to use exchange rates to grasp the growth they desperately require.

WILD CARDS

There are many wild cards that could turn dark clouds into silver linings or vice versa. The most troubling wild cards are the US and the European Union. Will US growth stall? And how will the election affect economic policy?

The questions are even more serious for Europe. How deep will the recession be and will Germany be part of it? And, of course, will the Euro survive in its present form? Big questions.

A Tight Squeeze for Wine

This combination of silver linings and dark clouds will create a Tight Squeeze for the wine industry. Let me explain how these pieces fit together.

A TIGHT SQUEEZE FOR WINE

These global economic factors in combination with the particular dynamic of the wine industry produce the conditions for what I am calling a Tight Squeeze for wine.

INCREASING COMPETITION

Competition is increasing all along the supply chain. There is more competition for wine grapes and bulk wine and more competition as well for those markets and market segments high decent margins.

THE BIG SQUEEZE

Wine maker margins will feel A Big Squeeze.

You will hear a lot today about the competition for wine grapes and bulk wine. Short market conditions are pushing up prices in many key market segments.

Wine producers naturally want to pass along higher costs to consumers but this is problematic in many market segments. Slow economic growth combined with buyers who see discounted prices as the new normal means that some producers will be squeezed out of some markets because of shrinking or even negative margins.

The squeeze will put increased emphasis on lower cost alternative sources of grapes and bulk wines and on those brands and market segments where margins can be maintained or perhaps even increased.

CURRENCY SHIFTS

The exchange rate shifts I talked about a minute ago will impact the Big Squeeze in several ways, creating both silver linings in the form of lower import costs and also dark clouds due to greater import competition.

The dollar is likely to continue to increase in value, but exchange rates are the most difficult thing to predict in economics and it is impossible to tell for sure how individual currency values will be affected. There will be silver linings for some, I’m sure, and clouds for others.

WILD CARDS: CHINA

There are many wild cards in the Big Squeeze scenario, but the biggest is certainly China. Economic growth will slow this year in China, but how much? The worst case scenario would be for Europe’s recession to be deeper than expected and the US recovery to stall. In this case China’s growth could fall dramatically.

How would this affect wine? Well, the direct effects would be rather small I think – slower growth in an otherwise rapidly growing market.

But the indirect effects would be significant. If China’s industrial production slows so would its raw material purchases, which would hit the Chilean Peso, Australian dollar and perhaps the South African rand particularly hard.

What’s the Best Way to Prepare for the Future?

And finally I suggest for your consideration Boulding’s Law, named for Kenneth Boulding, the great economist. Boulding once conducted a study of the history of the future — he looked back in history to see what people thought would happen in the future and then he fast forwarded to find out if they were right.

His conclusion. When the future finally came around, people were generally surprised — even when it was exactly what they expected.

Hence Boulding’s Law: the best way to prepare for the future is to prepare to be surprised!

The Deion Sanders Theory of Wine Markets

January 13, 2026 By Mike Veseth in Supply and Demand, wine, wine markets 10 Comments

Cyclical or structural? That was one of the most-asked questions in the wine business when everyone gathered for the Unified Wine & Grape Symposium in Sacramento last year.

Was the decline in sales due to a structural change? There were a lot of structural shift theories including generational change (bye-bye, boomers), heightened health awareness, affordability (a hot term right now), and more.

Other analysts, however, viewed the problem more in cyclical terms. The wine industry experiences periodic booms and busts. And consumers go through life-cycles, drinking less wine when young, more as they mature, and then less again when they start to “age out” of the market. Maybe we are just caught in the down-cycle and things will turn up if we give them time.

The Deion Sanders Theory: Both

A year later the answer looks clear to me. Structural or cyclical? The answer, which I am stealing from a 1995 Pizza Hut television commercial starring Deion Sanders and Dallas Cowboys owner Jerry Jones, is simple: Both. [Click on Deion’s image above to see the video.]

This looks to be the most serious global wine industry crisis in at least a generation, so maybe it is no surprise that it isn’t the result of a single force, but the “perfect storm” phenomenon. Certainly all of the structural shift concerns are at work and warrant attention and I’m not sure we have fully figured them out yet.

But this year attention has turned to the cycle problem in part because we can see it happening right in front of our eyes. But can we do anything about it? The problem is that the existence of large inventories has discouraged wineries from buying grapes and making wine. Vines are being grubbed up in California and around the world in response to the production decline. Inventory cycles may even result in a shortage of wine grapes in a few years, which will be a strange sight after the recent surplus. A shortage? Read on.

Econ 101 and All That

The role of inventories in the phenomenon of business cycles was part of the syllabus when I first studied macroeconomics. The logic went like this: Suppose there is an exogenous shock that reduced overall demand (see structural shift above). This leaves businesses holding unplanned excess inventories. They respond by reducing new orders (which deepens the decrease in demand) until stocks are depleted.

One characteristic of decentralized markets, and the factor that tends to make cycles repeat themselves, is the phenomenon of overshooting. When firms draw down inventories, they tend to wait too long to stop, creating a shortage. And when they build up inventories again they overshoot on the up side, too. This isn’t a strategy. It’s just what happens when you have to guess where the bottom and the top of the cycle are. And that’s a serious concern now, that today’s surplus could turn into a shortage in a few years.

Stocks and Flows

Right now we have large inventories in many parts of the wine market. Some wine producers have so much unsold inventory from previous vintages that they made very little (and sometimes none at all) in 2025. They won’t fully return to the grape markets until those surplus stocks either sell out or “age out.”

And, to be honest, some wine consumers have accumulated pretty big inventories, too, and don’t really need to buy a lot of wine in the short run. Wine production (which economists call a flow variable) won’t start to rise until inventories (a stock variable) have fallen for consumers, retailers, distributors, and producers. When that will happen is hard to predict, but it is the biggest question confronting the industry today.

The impact of high inventories and relatively low sales is a wine problem, but not just a wine problem. Jim Beam, the famous Bourbon producer, recently announced that it was pausing production for a year (a year!) to allow time for excess inventories to decline to a sustainable level. And apparently there is a glut of Scotch whisky, too.

What Would Deion Do?

What will the market look like when stocks and flows are back in equilibrium? Not like it did before. That’s because of the structural shifts that have taken place. The U.S. wine market will be smaller and different, but it will still be there.

So what should we do? Focus on the structural elements as many did last year? Or try to guess how the cycle will play out and develop strategies accordingly? I don’t know what you are going to do, but I think I can guess how Deion would answer that question.

Both.

2026: The Year to Change the Narrative about Wine

January 6, 2026 By Mike Veseth in wine, wine markets 3 Comments

Welcome to 2026. It promises to be a year filled with both celebration and anxiety. Anxiety is understandable given the many unpredictable political and economic forces at work both here in the United States and around the world.

2026 is a bit like this illustration from the Economist newspaper’s annual review, The World Ahead 2026. The ball’s in play and anything could happen: war, peace, boom, bust, success, failure. It’s (almost) enough to drive you to drink something stronger than wine.

A Year to Celebrate?

Anxiety is easy to understand. But what about the celebrations? Well, several important anniversaries will be celebrated in 2026, some with more enthusiasm than others. Economists like me, for example, will celebrate the 250th anniversary of the publication of Adam Smith’s book An Inquiry Into the Nature and Causes of the Wealth of Nations. Smith’s Invisible Hand has inspired many to embrace the power of markets and provoked others to oppose them, but its influence is difficult to deny.

2026 is also the 250th anniversary of the signing of the Declaration of Independence in Philadelphia, an act that gave birth to both the United States of America and to a set of ideas with global implications.

1776 was quite a year. Wealth of Nations and the Declaration of Independence fundamentally reframed how we saw the world. We are still feeling the aftershocks of those events today.

Reframing the Narrative of American Wine

2026 is the 50th anniversary of an event that sent shocks through the world of wine: the 1976 Judgment of Paris, which has been documented in George M. Taber’s famous 2005 book and popularized in a fictionalized 2008 film called Bottle Shock.

Taber, a Paris-based reporter for Time magazine, got wind of an unusual event. A panel of French wine experts was going to compare flights of California red and white wines with roughly similar French wines. The judging would be blind and the result was sure to be a triumph for the French. But if even one California wine did pretty well, there might be a story in it. So California-born Taber got the editorial OK to check it out.

The result, as you probably know, was indeed newsworthy (Taber got the scoop because he was the only journalist there). The top red wine and the top white wine were both from California. What a scandal!

If you analyze the data of the judging closely, as economists like me are prone to do (see “Wine by the Numbers”), the victory of Team California over Team France is not completely clear. But this much is very clear. The Judgment of Paris changed the narrative about California versus France and New World versus Old World.

Fresh Thinking Spreads

The biggest change was in how Americans thought about their own wines. How could the French be wrong about wine? Maybe the critics who had been promoting California wines (with limited success) were right? Interest in California wine, already on the rise, was magnified and accelerated.

The French were also impressed. Maybe not the average French wine drinker, but certainly some people at the top of the industry. Investment by French winemakers in California vineyards and winemaking facilities, already on the rise (Domaine Chandon was founded in 1974), was magnified and accelerated.

As Taber explains in Judgment of Paris, new thinking spread to wine regions all around the world. If California wines are actually very good, maybe we can learn something from them to make our wines world-class, too. The rise of quality winemaking, already under way in many regions, was also magnified and accelerated.

Time to Reframe the Question Today?

It is never easy to change the way people think about the world, but the situation today is more difficult in some ways than ever before. When Taber wrote his Judgment of Paris story (and when Morley Safer made his TV report on the French Paradox) mass communications were much simpler. There were a few magazines that millions of people read every week (Time and Newsweek) and a few TV programs that pulled in viewers every week (60 Minutes). Do you think a magazine article or television program would have the same effect today?

The news cycle was slower in the past, too. An idea might be talked about and turned over in discussion for days or weeks (or more). Ideas today are chewed up and spit out pretty fast. I’m not saying that it is impossible to make a lasting impact, but it is an upstream swim all the way.

It may be hard to change the narrative about wine, but that’s not a reason to give up on the idea. “Reframing the Narrative” is the theme of the 2026 Unified Wine & Grape Symposium, North America’s largest wine industry meeting. I hope everyone who comes to Sacramento at the end of the month is ready to pitch in.

Three Wine Economics Questions for 2026

December 30, 2025 By Mike Veseth in Economic impact, wine, wine markets 3 Comments

The year is almost over so it is natural to start looking ahead to 2026. Here are three questions relevant to the wine industry to keep in mind as you pull corks to celebrate the new year.

Question One: Are We There Yet?

It is no secret that 2025 has been a tough year for the wine business both here in the U.S. and around the world. There are bright spots, of course, but the thousands of acres of wine grapes that went unharvested this year are a clear sign of trouble as is the continuing removal of vines and conversion of vineyards to other uses.

Some wineries had enough wine in inventory to cover sales and made little or no wine in 2025. The conventional wisdom is that the industry is not going to begin recovery until that inventory of unsold wine is drawn down (or ages out and becomes unsaleable). Will we reach that point in 2026? Or will this be another bitter vintage for growers, especially those without firm contracts?

It is not something we talk about much in the U.S., but it would speed things along a bit if the government were to consider temporary crisis distillation programs or other policies to help reduce the overhang and bring the wine market into balance. Yes, you can go too far with programs like this and encourage “zombie” vineyards and wineries that exist only because of government support. No one wants that. But there is a useful short-term adjustment role for such programs, too, and it would help draw a line under the current situation and allow the industry to move forward.

Question Two: Will They or Won’t They?

The Supreme Court will soon rule on President Trump’s “Liberation Day” tariff regime. Will they declare them a valid exercise of presidential power? Or will they rule that many of the tariffs violate constitutional provisions and must be rescinded?

This question has importance that goes well beyond the wine industry, but wine certainly has a dog in the fight. The full impact of the tariffs will start to be felt in 2026 through higher costs and disrupted supply chains, but some of the biggest impacts are already here, transmitted through the political system, not markets. I’m talking about the loss of our largest wine export market, Canada, in response to U.S. tariffs on Canadian products. Tariffs are often a tit-for-tat situation and U.S. wine is suffering from the retaliation effect.

There are many follow-on questions here, of course. If the SCOTUS rules against the tariffs, will the ruling stick? Or will new tariffs appear to replace the old ones to keep the legal limbo going? Will the tariff tax revenues have to be repaid? If so, where will that money come from? The list goes on, but it starts with the Supreme Court’s decision. Stay tuned.

Question Three: What Next?

The U.S. economy is something of a puzzle as we bid 2025 adieu. Is growth booming, as the most recent GDP figures seem to suggest? Or is it slowing down and maybe struggling as jobs data indicate? Is inflation pretty much under control? If so, why is “affordability” the year’s hottest word (and not in a good way)?

There are many different ways to answer these questions and economics nerds like me add one more to the list: who will lead the Federal Reserve in 2026 and how will they react to economic news as the year unfolds? The public focus will be on interest rates. Up or down? But the bigger question is how we will navigate the traps and trade-offs of a complex, highly indebted, rapidly evolving economy.

I think this is a wine economics question because I believe that affordability is a significant explanation for the current malaise in wine sales. It’s not the only issue, but it matters. If you think of affordability as roughly the cost of living divided by disposable income, then what the Federal Reserve does is important because it can affect both the numerator and the denominator in many ways. There’s a lot at stake.

What’s next for the wine economy? And what unexpected events (unknown unknowns in the Donald Rumsfeld taxonomy) will appear? 2026 will be many things, but it won’t be boring!

Wine, Thanksgiving, and the Problem of Deadweight Loss

November 25, 2025 By Mike Veseth in Economic impact, wine, wine markets 1 Comment

Weight gain is the problem we most closely associate with Thanksgiving, but this Wine Economist column from 2021 argues that wine lovers need to consider the economic concept of deadweight loss when choosing a wine to bring to the festive gathering.

An Economic Theory of Thanksgiving Wine

The Wine Economist / November 15, 2021

Thursday is Thanksgiving Day here in the United States and many of us will gather with family and friends for the holiday feast. If you have been invited to share Thanksgiving with others (and if you are interested enough in wine to be reading this column), then you must confront a perennial problem: what wine should you bring?

Deadweight Loss?

Why is the choice of a gift wine an economic problem? Well, it isn’t much of a problem if you plan to drink it all yourself. Then you should just buy what you like — but don’t expect to be invited back next year!

Since the point will be to share the wine with other guests, the choice is more difficult because just as you can’t be sure exactly what dishes will be served, you cannot be certain what wines the other guests will like the best.

There is a pretty good chance that you will experience what economists call a “deadweight loss” which is more or less where the benefit that the guests derive from your wine is less than what they’d have gained from a simple cash transfer. The story (which is possibly true) is told about the time Malcolm Forbes threw himself an extravagant birthday party where the guests were served some of the rarest, most expensive wines on the planet. Forbes went from guest to guest pouring the evening’s show-stopper wine. Finally he came to Warren Buffet. Wine? said Forbes with a smile. No thanks, Buffet replied. I’ll take the cash!

Warren Buffet understood the concept of deadweight loss and wanted nothing to do with it!

The Problem of Other People’s Money

The problem is asymmetric information. You know your own preferences and budget situation pretty well and so you have a fairly good idea of what you are giving up when you buy an expensive bottle of wine as a gift. But you don’t know the preferences of the other guests very well or whether they would prefer your wine or a simple cash payment to be spent on something else. You can’t be sure that their gain is greater than your loss.

This leads (I hope you are following along) to the conclusion that you are most efficient when you spend your own money on yourself because you can fairly well calculate both the gain and the opportunity cost. You are less efficient (in terms of deadweight loss) when spend your money on others. You are even less efficient when you spend other people’s money on yourself. And you are hopelessly inefficient when you spend others people’s money on other people. What do you think?

So it would seem like the most efficient thing to do would be to decline that dinner invitation and stay home with the wine you buy for yourself. How sad! No wonder economics is called the “dismal science.”

It’s Not About the Wine

But here’s the notion that saves the day. Thanksgiving is not really about the wine (or the turkey or the green bean casserole), it is about the sharing. Thanksgiving is more a public or communal good than private good. And so, if you do it well, the particular elements of Thanksgiving including the wine will play a secondary role to the general warmth of the shared experience.

I used to get frustrated when wine wasn’t the centerpiece of gatherings, some of which were actually organized to celebrate the wine. But then I got over it. Wine is doing its job when it makes everything else better. Don’t you agree?

This fact changes a bit how you might approach your choice of a Thanksgiving wine to share. Cost is nearly irrelevant. Picking a wine that draws undue attention to you (and your fine taste or great wealth) almost defeats the purpose. A modest wine that makes everyone smile — maybe something with bubbles? — will serve very well. And then you can concentrate on what Thanksgiving is really about.

That said, no one will complain if you bring a nice Port, Madeira, or Sauternes to savor at the end of the meal.

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Happy Thanksgiving, everyone. Enjoy the wine and the feast and most of all each other!

Small is Beautiful: Bulichella’s Distinctive Tuscan Coast Wines

November 4, 2025 By Mike Veseth in Italian wine, wine, wine markets Leave a comment

This is not an easy time to be an Italian winemaker. There is climate change to deal with, of course, and the global fall in wine (and alcohol in general) consumption. Add to this the dramatic 28 percent decline in shipments of Italian wine to the U.S. market that has been reported recently by the Unione Italiana Vini. U.S. consumers love Italian wines, which is why they are the biggest import category, but the combination of tariffs, unfavorable exchange rate movements, and pre-tariff stock-building have taken their toll.

The headwinds are the same for all wine producers. Small wineries may lack economies of scale and scope, but small can be beautiful in a crisis. A small winery doesn’t have to push vast numbers of bottles and cases through the distribution pipeline to balance its books. They need the right customers to find them in just the right number to balance the books. It’s a problem and the current economic environment doesn’t help, but it is a human-scale problem.

Italian by Design

This is one of the lessons we have taken away from our recent discovery of Bulichella, a wine estate in Suvereto on the Tuscan coast between Grosseto and Livorno. The Suvereto appellation may not be large or famous like many others in Tuscany, but it boasts DOCG status, so its quality is recognized.

Sue and I were surprised to be invited to a Zoom tasting of Bulichella wines with the winemaker Nico Miyakawa because this didn’t seem the moment to take Italian wines to the U.S. market. But I guess we were thinking big wine. So we listened, sipped, and learned.

Bulichella is a project that Hideyuki Miyakawa began in 1983, first in partnership with friends and eventually as a family project of his own. Miyakawa is Japanese by birth and, I guess you could say, Italian by nature. He was a cofounder of ItalDesign, the famous automotive design practice. ItalDesign achievements include cars for Fiat, Alfa Romeo, DeLorean, Volkswagen, Maserati, Lotus, BMW, and Audi. The designs, both limited-output and mass-market, have helped define the modern auto era.

The Labels Tell a Story

So it is not entirely surprising that Miyakawa brought a certain style to Bulichella (named for the locality within the Suvereto appellation), which continues today with his grandson Nico Miyakawa. Sue and I found ourselves attracted to two very different ideas of design when we sat down to try the wines.

The labels, which were created by members of the Miyakawa family, are very personal and can almost be read like parables. The label of the Coldipietrerosse — a Cabernet, Merlot, Petit Verdot blend — shows the winery, organic farm and vineyards, the sea, and the island of Elba in the background. All the pieces seem to fit together naturally, without tension or conflict.

The label for Rubino, a blend of Sangiovese, Merlot, and Cabernet, shows a family of wild boar in the vineyard. Are they the Miyakawa family? That’s my guess, especially when I look at the label for Tuscanio, a 100 percent Vermentino wine. Two generations of wild boar look down on the vineyards and territory. What are they thinking? What should we think?

The thing that is hardest to make out on the Bulichella labels shown here is the name of the winery! Bulichella, Suvereto, Tuscany is printed in teeny tiny type. The story is the brand, not the winery name. An interesting design choice, don’t you think?

Designed by Nature

So there seems to have been much thought given to how nature and family fit together at Bulichella. Would this design influence the wines themselves? The only way to answer the question was to pull corks.

We started with Rubino. At about 15,000 bottles per year, it is the winery’s flagship and largest production wine. The wine was fresh, elegant, and restrained. The heavy hand of a winemaker was nowhere to be found. The finished wine didn’t really taste like its components (we would not have guessed Sangiovese), so what did it taste like? The place? The terroir? Hard to tell, since we’ve never been there.

Tuscanio, the Vermentino wine, confirmed our suspicions. It was different from any Vermentino we have ever tried. Nothing like Sardinia. Could we sense the rocks and the sea that define Bulichella’s domain? Yes, that’s how it seemed to us. And the wine didn’t just hold up as time passed, but it seemed to become more and more like itself.

This prepared us pretty well for the limited production Coldipietrerosso, which is named for the hill with the red rocks that you see on the labels. Seamless, elegant, refined. Not quite like anything else.

Small is Beautiful

Before you ask, you won’t find these wines in the United States. Not yet, at any rate. Nico and company are looking for the right distributor partners to bring their wines to America. They don’t need a big mass-market pipeline because they couldn’t possibly fill it. And the wines are so particular to place that they are best seen as hand-sells.

So the tariffs and the falling dollar are problems, but not the most important challenge. Find the right people to drink the wines, to distribute the wines, to import the wines. That’s the human-scale problem these wines were designed for. Small really is beautiful sometimes, don’t you think?

Uncorking the Hidden Diversity of the Sparkling Wine Category

October 28, 2025 By Mike Veseth in Chile, wine, wine markets 3 Comments

The sparkling wine category has been one of the wine market’s winners of the last 20 years. Although sparkling wine sales are struggling right now along with the rest of the wine market, bubbles are much more of a thing than they were in years past.

Much of this success is driven by Italy’s Prosecco, which in many ways redefined sparkling wine. If you think of bubbles as French and expensive, saved for ritual consumption at serious celebrations, then Prosecco is a revelation. Bubbles can be fun and suitable for all occasions, both serious and frivolous. Hard to resist!

More to Sparkling Wine

But there is much more to sparkling wine than the European Big Three: Champagne, Prosecco, and Cava. There are dozens of other sparkling wines in France, Italy, and Spain and around the world. Sparkling wine production is diverse both geographically and in terms of wine grape varieties used and methods employed.

It is a shame, really, that all these very different sparkling wines from so many places tend to be lumped all together in the “sparkling wine” section of the wine wall. They all look pretty much the same as you stare at them. What’s the difference? A lot! It’s time to uncork the diversity of sparkling wine today and appreciate what an opportunity it is to explore the world of bubbles.

Here are a few examples of sparkling wines that we have enjoyed. What ties them together? Bubbles, of course, but they were all also both delicious and surprising. Feel free to use the comments section below to tell us about your own recent discoveries.

Enchanting New Mexico

Most people don’t think of New Mexico when they think about wine, so they are surprised to learn that the state has a small but active wine industry and positively shocked to learn that wine was first produced in 1629, nearly 400 years ago.

New Mexico is especially know for sparkling wine because of the Gruet Winery, which was founded in 1984 by members of the Gruet family, producers of sparkling wine in a place called Champagne (you might have heard of it!).

Sue and I were recently introduced to wines from the Vara Winery & Distillery in Albuquerque. Our first taste was the Vara New Mexico Sparkling Brut 2023, which was made by winemaker Laurent Gruet using the traditional method and a unique blend of grapes: 72% Chenin Blanc 18% Listan Prieto 10% Pinot Meunier. Listan Prieto? It is a very old Iberian grape variety that came to Mexico (and then New Mexico) early on. It goes by many names, but you might know it as the Mission grape. It is just my imagination, I know, but I think it gives the wine both flavor and a sense of history.

The wine was declicous and distinctive. Many of the Vara wines are made with grapes from California and Washington State because New Mexico just doesn’t grow enough grapes to meet the demands of local wineries.

Bubbles from Wine’s Birthplace

Sparkling wines from Georgia and Armenia? Probably not the first thing you think of. Georgia is better know for its traditional still qvervi wines and Armenia is better knows for its excellent brandy. But the sparkling wines are there and worth seeking out.

We’ve recently sampled Pet-Nat sparkling wines from Georgia’s Mtsvane Estate. The sparkling Saperavi was stunningly beautiful and delicious. It is joined by a Pet-Nat blend of 70% Chinuri and 30% Goruli Mtsvane.

Meanwhile Armenia’s wine industry is returning to its roots, as has been documented recently in the film SOMM: Cup of Salvation. We have been serving Keush sparkling wines made with indigenous grapes including Areni and Voskehat to our surprised and delighted friends.

Shiraz and Grenache?

We are always interested in trying sparkling wines made with unexpected grape varieties. There was a memorable sparkling Riesling at our very first Open That Bottle Night dinner, for example. And a visit to Rockford winery in the Barossa Valley gave us an opportunity to try a sparkling Shiraz so good it has achieved cult status among wine lovers Down Under.

The latest addition to our growing list is a Cava Brut Rosé from Dibon made from Garnacha grapes. Garnacha (a.k.a. Grenache) is such a versatile wine grape, so it is great to taste a sparkling version.

Southern Comfort

Have you tried many sparkling wines from Southern Hemisphere producers? There are lots of sparkling wines produced south of the equator, but you might have not find them on your local store shelves.

The French have clearly known about the Southern Hemisphere’s potential for a long time. Chandon Argentina was founded in 1956 and Chandon Australia was established in the Yarra Valley in 1986. The wines are made in the same way using the pretty much the same grape varieties that Chandon uses in France, California, and China, but have their own personality.

Cool climate Tasmania is a natural fit for sparkling wine production and a wine we sampled a couple of years ago from House Arras was one of the most distinctive and delicous sparkling wines we have had in a long time.

Chile has such a tremendous range of terroirs that it makes sense that it would produce sparkling wine, too, but I don’t remember drinking one … until now! We recently received a traditional method Carmen Brut Nature from the Limari Valley. Very excited to pop the cork.

I’ll finish this intentionally incomplete survey with Brazil. Most people don’t associate Brazil with wine, much less sparkling wine, but that’s a mistake. Brazil attracted immigrants from many wine-producing countries (Portugal, Italy, Germany, and more) and they brought both a love of wine and the ability to make it with them when they arrived.

The second Brazilian wine we ever tried was a Prosecco-style sparkling wine made by the Aurora winery, Brazil’s largest wine cooperative. It was as refreshing as it was surprising. (The first Brazilian wine was a Marcus James Zinfandel, which was for several years a a popular brand of wines sourced from Brazil.)

If you are interested in trying a Brazilian sparkling wine, look for a brand called Bom Dia (that’s good day in Portuguese). Bom Dia Brazilian Bubbles are canned sparkling wines and, although they have only been on the market since 2024, they are already getting attention. The brand has been nominated for Wine Enthusiast’s Innovator of the Year award.

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I have only scratched the surface of the world of sparkling wine. Looking for a project for the holiday season? See how many different and interesting sparkling wines you can find and pull some corks. You won’t regret it.

Wine Industry Uncertainty 2025 Update

October 14, 2025 By Mike Veseth in Economic impact, wine, wine markets 2 Comments

Nine months ago today, The Wine Economist published its annual column that, inspired by the upcoming Unified Wine & Grape Symposium, looks ahead to the future. The theme was sort of anti-climactic at the time, but it seems pretty much on the mark at this point: the future of wine is always uncertain, but 2025 is special. There are more unknowns and even unknown unknowns than ever before.

Frozen by Doubt

That’s a problem because fear, uncertainty, and doubt tend to freeze businesses in their tracks. It’s hard to know what to do, so the tendency is to wait until the smoke clears. The air is still far from clear both for the wine market generally (see this recent Wine Economist report) and for key international variables.

Many predicted that the dramatic increase in tariffs would lead to higher retail prices and this has happened to a certain extent. However, many firms have delayed raising prices until they know for sure what the tariff rates will be and which products and countries will be exempt. U.S. tariff policy has changed course several times and there is no assurance that the tariffs in place on the day you sign a contract will be the same ones in force when the shipment arrives and payment is due.

The Pasta War?

There was a surge in wine imports prior to tariffs coming into force. Now it seems to be wait and see because the situation could change yet again. Just last week, for example, we learned about the 107% “pasta war” tariffs that the U.S. threatens to impose on Barilla and some other Italian pasta makers. Thirteen Italian producers are accused of “dumping” pasta in the U.S. market and will be subject to a 92% pasta tariff on top of the existing 15% “reciprocol” tariff. The Financial Times reports that the import taxes will go into effect in January, so you might want to stock up.

Wine. Pasta. What next? I have no idea.

November is an important month in this regard because that’s when the Supreme Court hears arguments on whether the tariffs that apply to wine were legally imposed. Sectoral tariffs (steel, aluminum) may be legal, but general tariffs such as those that apply to wine may have been incorrectly applied, with unclear consequences. For what it is worth, the Economist newspaper’s AI-powered SCOTUSbot predicts that the broad tariffs (including wine) will stick.

In the meantime retaliation against U.S. products in foreign markets continues. The loss of much of the Canadian market for U.S. wine is especially damaging as Canada was the #1 export market. Wine’s problems mirror in a small way the situation of much of U.S. agriculture, which is heavily focused on exports. There is talk of $10 billion in federal aid to farmers to offset some of the negative effects, but I don’t know if any of this is earmarked for winegrape producers.

Dollar Dilemma

Uncertainty permeates other economic variables. The dollar has fallen this year, for example, when many thought it would rise. The logic (see below) was that tariffs would increase inflation and force the Federal Reserve to raise interest rates. The inflation has been less than expected so far, but the economy seems to be weakening. The Fed is now lowering interest rates, accepting the risk of higher inflation in order to reduce the chances of slower or negative growth.

Inflation or unemployment? That’s a lot to worry about. But there’s more. But what will happen in the future if, as the Treasury Secretary has suggested, the U.S. does “whatever it takes” to support Argentina’s economy and its tenuous debt situation? I don’t have an answer to that question. More uncertainty!

The list of uncertain factors goes on and on. Here’s the original article from earlier this year.

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2025: Wine & the Age of Uncertainty

The Wine Economist / January 14, 2025

The Unified Wine & Grape Symposium, North America’s largest wine industry meeting and trade show, is only a few weeks away. I will be in Sacramento to moderate the State of the Industry session, which features an impressive lineup of wine industry experts:

Jeff Bitter, Allied Grape Growers
Glenn Proctor, The Ciatti Company
Stephen Rannekleiv, Rabobank
Danny Brager, Brager Beverage Alcohol Consulting

The panelists have decades of experience in the wine industry, which informs their analysis of current problems and future prospects. It is a tremendous opportunity to hear what the experts are thinking now and to talk about it with the other attendees.

There are many other sessions at the Unified covering all sorts of topics in winegrowing, winemaking, marketing, and business operations. I am particularly interested in the Thursday general session on Crafting a Positive Narrative: Promoting Wine in the Face of Challenges, which will be moderated by New York Times wine critic Eric Asimov. One of the biggest challenges, of course, is the rising anti-alcohol movement. Telling wine’s positive story is as difficult as it is important in the current environment.

There is something for everyone at the Unified (click here to view the complete program and click here to read the speaker bios). Sue especially appreciates the big trade show where more than 900 exhibitors will highlight what’s new in the wine industry from the biggest machines, smartest technology, and best products and services from vineyard to cellar to bottling line all the way to market.

Always the Age of Uncertainty?

I always start the State of the Industry session with a few remarks to set the stage and this year I have chosen a theme, the Age of Uncertainty. This is a time of great change in the wine industry and change makes people nervous.

Age of Uncertainty? I know what you are thinking. It is always the Age of Uncertainty in the wine business. Growing grapes is risky, making wine is risky, and selling wine is risky. There is no part of the wine business that does not have an uncertain component. Wine is a global business, too, and while global markets create opportunities they also introduce additional layers of risk.

I specialize in international and global wine markets, so I am especially concerned with how international economic policies add more layers of uncertainty to wine business today. We have been told to expect high tariffs (on wine and just about everything else) in 2025. Depending upon how they are structured, and how our trading partners react to them, tariffs can have a number of direct and indirect effects. There’s a lot at stake and the final outcome is difficult to predict.

Indeed, the International Monetary Fund recently identified the threat of tariffs as a major global economic concern. The possibility of tariffs has driven up long-term borrowing costs around the world, according to the IMF, which will release its new report on the global economy later this week.

And this week’s Economist newspaper highlights uncertainty about tariffs and other policies as a main cause of global instability.

It is easy to see why uncertainty has spread. Will Donald Trump deport millions of people? Nobody knows. But if he succeeds inflation could jump as employers lose workers. The story is similar for tariffs, which would also increase prices. At the same time, potential Chinese counter-measures in a trade war, such as a devaluation of the yuan, could prompt a global deflationary shock.

The rising perceived risk, according to the Economist, helps explain falling bond prices, rising mortgage interest rates, and many other current trends. They say that what you don’t know won’t hurt you, but uncertainty clearly has a cost.

Not by Wine Alone

I know many people who think a tariff on imported wine would benefit American growers and producers and others who strongly oppose the idea. But it is important to remember that we aren’t talking about tariffs just on wine. Although it is hard to know right now (that uncertainty thing), it looks like the new administration will impose tariffs on most imported products from many or most of our trading partners, with the highest tax rates on China, Mexico, and Canada, the countries with whom we trade the most.

Border taxes on such a long list of imports have different effects than a tax on a specific product category like wine. That’s part of the uncertainty problem. U.S. producers may gain from protection from imports but lose from higher costs for imported supplies, equipment, and technology. Labor costs, interest costs, and insurance costs would all likely be pushed higher by rising inflation.

And U.S. tariffs aren’t the end of the story. How will other countries react? Will European nations retaliate with tariffs on U.S. wine? Probably not. I think they’d focus on spirits, not wine. Would Canada target U.S. wine? Yes, I think they might and that’s a problem because Canada is a good market for U.S. wine exports.

The Dollar Also Rises

President Trump favors a falling dollar value on foreign exchange markets because that would reinforce his trade policy by discouraging imports and promoting exports. But tariffs tend to push the dollar higher as we have seen since the election results were announced. The dollar’s value rises when it sounds like tariffs will be used as a blunt weapon to keep out imports. The dollar falls, however, when the rhetoric suggests tariffs as targeted strategic tools to gain specific concessions. Which way will tariff policy lean in 2025? I don’t know, do you?

How are tariffs and the dollar related? Here’s one way. Tariffs tend to increase inflation, which forces the Federal Reserve to keep interest rates higher than they otherwise would be. This attracts foreign capital that boosts the dollar’s value, making imports cheaper in dollar terms and U.S. exports less competitive abroad.

Immigrant policies are the third element of the Age of Uncertainty for wine in my analysis. It is too soon to know how border controls and deportations might affect labor both generally and in industries such as agriculture and construction that are most exposed. So wine’s Age of Uncertainty is a complicated matter. What’s the bottom line? I’m saving that for the State of the Industry session.

Galbraith’s Uncertainty Principle

Why did I choose this theme for my remarks? The idea was inspired by an old book that strikes me as still relevant today. The Age of Uncertainty is the title of a 1977 BBC/KCTS television series and an accompanying book by the distinguished Harvard economist John Kenneth Galbraith. The book and videos, which survey two hundred years of economic history and the history of economics, were timed to coincide with the 200th anniversary of Adam Smith’s Wealth of Nations.

People tend to remember Galbraith as the sophisticated author, public intellectual, and Harvard professor that he became, but his personal story is more complicated. He grew up on his family’s small Ontario farm and seemed set for a farming career, graduating from Ontario Agricultural College in 1931. But the 1930s were not the best of times for farming and Galbraith soon found himself doing PhD studies in agricultural economics at the University of California and then working for the U.S. federal government’s Agricultural Adjustment Agency (AAA) trying to prop up farm prices.

I don’t think that wine is mentioned even once in Galbraith’s book, but his agricultural background and experiences are easy to trace. The world has changed a lot in the almost 50 years since The Age of Uncertainty first appeared (and nearly 250 years since Wealth of Nations), but American winegrowers and agriculture generally can certainly relate to Galbraith’s story and the concerns he expressed in this book.

Three Cheers for Saperavi and Georgia’s Wine Market Miracle

October 7, 2025 By Mike Veseth in emerging wine regions, wine, wine markets 5 Comments

This column is inspired by a recent birthday celebration dinner that featured three very different Saperavi wines from Georgia.

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Mariam invited us to a dinner celebrating her husband Todd’s birthday and we accepted with enthusiasm, offering to bring some Georgian wines with us. Mariam is originally from Georgia, so her dinners often feature dishes you’d find at a Georgian supra feast. Sue and I were happy to share Georgian wines, but we had a selfish hidden motive. We wanted to see what our fellow guests would think about the wines.

The guest list was diverse in terms of wine experience. Mariam and Todd knew Georgian wines very well, of course. Several guests were knowledgable wine enthusiasts, but had never tasted Georgian wines. Saperavi? Is that a grape or a region or a brand? And the rest were novices, intrigued by the opportunity, and willing to try something new.

Three Faces of Saperavi

Sue and I brought three Georgian wines we had received as samples. The sparkling Mtsvane Estate Pet Nat Saperavi Rosé was beautiful in the glass and delicious on the palate, with nice acidity and great balance. Everyone enjoyed this wine, but Todd’s reaction was the most memorable. One taste and he knew where he’d had that wine before. At their wedding in Georgia. It was not just a special wine but also a memory of a special day. And, of course, it was a completely different idea of Saperavi. A great beginning.

The other two wines we brought to the party were alike (both were Saperavi wines), but also different. We wondered what our friends would think of them. One, the Dugladze Saperavi Qvevri, was made in the traditional Georgian way, fermented and agerd in qvevri clay vessels buried in the ground with only the lip of the vessel in view. This is a very old way of making wine which has been rediscovered and put into use around the world in different forms.

The final wine, a Schuchmann Saperavi, is a modern take on Georgian wine, fermented and aged in stainless steel to preserve aromas and fruit. Sue and I visited the Schuchmann winery when we were in Georgia for a wine tourism conference several years ago. We were confident that this wine would please the guests. But how would it compare to the other wines?

Of course the wines paired well with Mariam’s Georgian-style feast. What was surprising was the reaction to the wines. As Sue noted the next day, everyone embraced the wines and enjoyed them (which doesn’t always happen with unfamiliar wines or even familiar ones), but in different ways. One novice was fascinated by the Dugladze and Schuchmann wines because they were the same but also so different. She tasted them again and again.

Sue appreciated the qvevri wines, but was drawn to the clean stainless steel Saperavi best. What nice fruit and balance! Who wouldn’t enjoy this wine? I was drawn to the qvevri wine as often happened when we were in Georgia. I find a certain energy in some of these wines that really appeals to me.

Georgia’s Wine Market Miracle

Conclusions? The sample size, both in terms of drinkers and wines, is too small to allow much generalization, but it is hard not to be impressed with these wines and Georgia’s progress.

Saperavi may be Georgia’s best known wine grape variety, but it is certainly not the only one or even, depending upon whom you ask, the best. Saperavi is to Georgia what Malbec is to Argentina, the relatively easy-to-pronounce signature grape variety that is both an advantage in breaking into new markets and a liability because it can over-shadow other options like a delicious semi-sweet red Kartuli Marani Kindzmarauli and a dry white Akido Kisi.

To Saperavi and Beyond

We had an opportunity to taste both these wines a week after the birthday party gathering. Todd’s brother missed the party because he was fishing in Ketchikan and we were invited back to share the Coho salmon he caught there. What a treat!

White wines are actually more popular in Georgia than red wines (and are gaining share on reds in the overall market here in the U.S.). And sweetish reds are a large market segment here, too, even if they don’t get a lot of publicity. Lots of potential for Georgian wines.

The Kisi was a perfect match for the Coho baked under a layer of caramelized sweet onions. The Kindzmarauli was juicy and grapey and paired nicely with everything, but was is “semi-sweet?” As we know from our Riesling tastings, sweetness is very subjective, but Sue says that this wine is so well-balanced that she’d call it off-dry, not semi-sweet. In any case it was a hit with both Mariam (it reminded her of her Georgian home) and Todd (it was the taste of the first wine he was served on his first trip to Georgia).

Random Walk in Tbilisi?

You are unlikely to stumble upon Georgian wines like these on a random walk through your upscale supermarket’s wine aisle, but imports of Georgian wine have been growing in recent years. I searched the inventory of my local Total Wine & More store, for example, and I was surprised to find 37 different Georgia wine SKUs. That is sort of a miracle when you think about it. Red, white, and qvevri amber. Dry and semi-sweet. Easy to pronounce Saperavi and more challenging grape variety, region, and style names, too.

How does Georgia compare to other “Cradle of Wine” countries in terms of their Total Wine footprint. Armenia, which has been making great strides recently, has only two wines on my local Total Wine shelf, both made with the Areni grape variety which is easy to pronounce and also makes delicious wines. I could not find any wines from Turkey, which also has a very long wine history.

Three cheers for Saperavi, Georgia, and its wine market miracle. And best wishes for success navigating the uncertain waters ahead.

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I mentioned Turkey in the article above for three reasons. First, because, of course, it shares a place in wine history with Georgia and Armenia. Second, because Sue and I have a little experience with Turkish wines and appreciate their potential in the U.S. market. The third reason is that I have been reading a review copy of Mehtap Emmie Turan’s book Turkish Wine: Past, Present, and Future of Viticulture in Turkiye. The book examines the land, the grapes, and the wines as you would expect, but I especially appreciate the attention to history, culture, politics, and business challenges. It made me realize that, while Turkey and Georgia are different in very important ways, they also share certain challenges. Perhaps Georgia’s success will inspire the Turkish wine sector. Fingers crossed.

“Globalization versus Terroir” after 20 Years

September 23, 2025 By Mike Veseth in globalization, Shameless Self-Promotion, wine markets 3 Comments

“Globalization versus Terroir” is the title of my first published essay on wine economics. It appeared as a chapter in my 2005 book Globaloney: Unraveling the Myths of Globalization, which was the third in a four-volume series analyzing globalization and its discontents. (See list of books below.)

The wine world has changed a lot in 20 years and my thinking about the wine economy has changed, too, so I thought it would be interesting to re-read that first essay and see what I think about what I thought then. Here is a brief report.

Globalization versus Globaloney

The book Globaloney was conceived as a collection of case studies of how globalization was playing out in different industries. I had noticed that much of what we were told about globalization was based on a few vivid stories from specific industries, boldly generalized to global dimensions. So globalization is McDonaldization, for example, or Coca-Cola-ization. Globalization was almost always a bad thing and almost always centered in the United States.

I was suspicious that something as complicated as the global economy could be understood in such a simple way. And I knew from previous research that the search for counterexamples would be interesting. An earlier book, Selling Globalization, had argued against the prevailing wisdom that globalization was unstoppable. Global economics is built on global finance, I argued, and finance is fragile by nature. Critics doubted this conclusion until the Asian Financial Crisis and then the Global Financial Crisis. And then they didn’t doubt so much.

What’s really true about globalization? And what’s just “globaloney?” That’s what I was trying to figure out.

Globalization versus Terroir

I would like to say that everything I know about terroir I learned from Adam Smith’s Wealth of Nations, which is almost true. It is probably hard to imagine Smith, an austere Scot, sniffing, swirling, and droning on about vineyards and microclimates, but he did develop both knowledge of and appreciation for fine wine in his mature years and recognized the importance of what we call terroir.

Significantly, because after all he was Adam Smith, he noted the economic value of terroir, real or imagined, in establishing a winery’s or a region’s reputation. There was money in terroir then as there is today.

How does globalization affect wine terroir? Is it a McDonaldization situation, where the incentive to expand globally leads to homogenized products? Does the global mean the death of the local when it comes to wine?

I argued that while wine is a global industry, there really are not many truly global wine firms or dominant regions. Even Gallo, the largest wine producer in the world, has only a tiny share of total output and sales. Most wine-producing countries drink mostly their own products (a significant home-court advantage), limiting global effects.

Up the Wine Ladder

The impact of globalization on terroir seemed to me to depend on which step of the wine ladder you consider. At the bottom, basic commodity wine, there isn’t much terroir to lose (because that’s not what consumers are looking for). But globalization has had a big positive impact in raising the standard of quality of these wines by spreading winemaking knowledge and techniques and forcing bad local wines to compete with better wines from other regions.

The situation might be different at the top of the wine staircase. Winner-take-all global markets have the power to push the price of the best wines to stratospheric levels that Adam Smith could not have predicted. Great terroir wines are traded or collected, but not necessarily opened and enjoyed. A shame!

I also cited the Parkerization argument, which was very popular when the book was written. The growing global market put more power in the hands (and palates) of famous critics like Robert Parker, providing a powerful incentive for upwardly mobile winemakers to make at least one high-scoring “Parker wine.” If the top wines are all trying to please one critic, then won’t they all start to taste the same? That’s an unexpected globalization consequence for sure.

What about the wines in the middle, the ones that are neither commodities nor investment-grade icons? That’s the interesting question! I thought that product differentiation would be the key here because undifferentiated wines would sink toward the commodity bottom. Successful differentiation would allow for higher prices and margins. Looking back at this part of the essay I can see indicators of the premiumization trend that would gather force only a few years later.

Land versus Brand

What’s the secret to differentiation? Here’s where I made a mistake. Because I framed the chapter as globalization versus terroir, I naturally look to an increased emphasis on terroir as the key. So I was very hopeful about how things would turn out.

But, of course, terroir isn’t the only strategy. I should have paid more attention to branding as a strategic response to premiumization forces in the middle market tiers. I just wasn’t thinking land versus brand at this point. But I got there eventually (with the help of many wine people), which led to The Wine Economist and the five wine business books, starting with Wine Wars.

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Here are the books in my globalization series.

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