Anatomy of Wine Profit and (Mainly) Loss: South Africa versus Australia

Australia and South Africa are rivals on the rugby field, where they compete at the highest levels, and on your store’s wine shelves, too, where they fight for shelf space and consumer attention.

It is a good idea to study your opponent to see similarities and differences and that is just what Christo Conradie did earlier this year at the  Vinpro Information Day meetings in the Cape Winelands in a talk called “Producer and Winery Realities.” Conradie revealed the results of a study of profitability within South Africa’s wine industry and the data were sobering. (You can download a pdf of the presentation here.)rsa

Profit and Loss

Overall, only about 15% of South African producers are making strong profits while 49% have what might be unsustainably low profitability and 6% are breaking even. Fully 30% of producers reported losses. That’s a lot of red ink.

That news got my attention, but Conradie’s comparison with Australia really made me sit up. Breaking profitability down by region, the data for Australia show what you might expect. Profitability is best in some of the premium wine areas — Barossa, Yarra Valley, McLaren Vale, Coonawarra — where a majority of producers are profitable. But in Riverland and even in Mudgee the red ink flows and flows. Almost no one reported a profit in 2014 in these two regions.

Lots of reason for red ink. Weather, exchange rates, market momentum, problems in China and so on. Margins are the key to profitability and the premium prices that Barossa and Coonawarra producers are able to earn are certainly an important factor in their success.oz

The Premium Premium Problem

Now turn to an analysis of South Africa’s regions and a somewhat different picture emerges. Stellebosch is a premium wine production zone but also a high cost area. The price premium that  Stellebosch wines receive in the market does not appear to be enough to offset higher per bottle costs, eating into margins. Only 8% of Stellenbosch producers reported strong profits while 56% indicated loss.

The South Africa regions with the best profitability were generally those where higher yields were possible, which brings down cost, although Conradie made a point to show that the problem is not as simple as getting higher yields. A balance of many factors is needed to produce sustainable profit levels.

Supermarket Empiricism

Sue and I last visited South Africa in 2014 (I was a VinPro Information Day speaker) and we were surprised by the wine prices we saw. Converted into dollars, the inexpensive wines (including a South Africa-sourced Gallo Barefoot that we spotted in one supermarket) were about where we expected them to be. But premium RSA wines, many of them world-class, seemed  under-priced, especially when converted to U.S. dollar amounts.

In other words, it seems that the quality price premium for South African wines is relatively low and I think this is true in the export market as well as for domestic sales. Higher quality South African wines get higher prices, but not always to the same extent as producers in other countries. Or at least that our unscientific observation.

This is not news to the South African winemakers, who seem divided about whether to focus on the profitable higher-yield sector of the industry or to invest in reputation  and regional identity to differentiate products and raise the premium premium (if you know what I mean). Selling more is important in the short term, but earning higher prices is key in the long term.

Swirling Wine Export Currents: China, Australia, Portugal, Angola, USA, Brazil

wine-glass-swirlSue and I are in historic Évora, Portugal where I am speaking at the 10th Alentejo Vine and Wine Symposium. This visit has given me an excuse to learn more about Portugal’s wine export markets and it is eye-opening to see how the economic landscape is changing.

Australia Plays the China Card

International wine trade patterns are changing rapidly and in surprising ways for Portugal and other wine-producing nations. I have many friends who still are not convinced that China is now or ever will be an important factor in global wine trade beyond high end Burgundy and Bordeaux, for example. They just can’t imagine China as a wine power.

They will be surprised at the news from Australia that exports to China now exceed sales to the big U.K. market, putting China #2 after the U.S.for Australian producers  And if you combine exports to China with those to Hong Kong, this market rises to #1 on the Australian wine export league table, surpassing both the US and UK. Imagine that!

This dramatic change, which Kym Anderson predicted a few years ago, is the result of rising Chinese interest in wines in the middle market — not just cheap bulk imports and not just high end trophy wines. Australia is benefiting from this movement and earning a return on their determined investment in the Chinese market in terms of branding and reputation.

Here in Portugal, the currents are shifting, too, and China is part of the story. Consider the latest international trade data provided by “Wine by Numbers,” a project of Il Corriere Vinicola and the Unione Italiana Vini, an association of Italian wine producers.


Portugal Plays the Angola Card

The first table shows total Portuguese bottled wine exports (including both table wine and Port) for 2015 and it is fascinating to see the huge shifts that are taking place. Note strong gains in both volume and revenue in the U.S., Canada, Poland, China and Sweden. Portuguese wines have definitely gained traction in some key markets as quality has continued to improve and distribution and marketing become more effective.

Some of these gains are offset by declining exports to Angola, however. A former Portuguese colony, Angola has benefited from a petroleum-fueled economic boom in recently years and become a good  market for Portuguese wine producers. These data indicate that the oil bust has severely affected the wine market. It is a good thing that the rising exports to other countries offset the falling sales here.

You may be surprised to see Angola on this list, but Africa is a diverse continent in terms of its economic profile and has experienced rapid economic growth creating a number of significant wine markets. A recent Economist newspaper survey forecasts continued robust growth in Africa’s key middle class consumer market, even taking the oil impacts in Nigeria and Angola into account.

exports 2

[Not] Any Port in a Storm

The second table breaks out Port exports and adds an important dimension to our understanding of Portugal’s export environment. Although the bottom line shows that Port exports are relatively stagnant overall, there are tremendous market shifts, particular falling exports to Brazil and Germany and rising sales to Ireland, Denmark, Poland, Sweden and the UK. The U.S. is a rising market for Port, but only #5 on the list.

Now please compare the two tables, mentally subtracting Port exports from total bottled wine exports to get a sense of where Portuguese table wines are being sold. A number of interesting patterns are revealed. The first is the critical importance of Angola, despite its recent economic problems, and also Brazil. According to these data, Angola imports more bottled Portuguese table wine than the U.S., U.K. or France.

The U.S. is a somewhat distant #2 on the bottled table wine list, but of great importance because the market is growing and prices are on the rise. Taken together, the U.S. and Canada are as large a market for Portuguese table wines as Angola and, unlike Angola, a  source of growth both in terms of revenue and rising unit price.


Follow the Money (and Growth)

Finally, I thought you would be interested in these bulk wine export data. U.S. bulk wine imports from Portugal grew dramatically in 2015, but from a very low base (similar to the stories in Norway and the U.K.). Other bulk wine export markets (especially Angola) experienced significant declines, however, so that the bottom line is negative.

I’m speaking to the Alentejo region wine producers and data for Alentejo (click here to download a pdf) indicate the importance of the U.S. market to this region, too. Angola and Brazil were Alentejo’s leading non-EU export markets in 2014 followed by the U.S., Canada and China.

Follow the money, that’s what Deep Throat said, and follow the growth is good advice, too. For Portuguese table wine producers, the biggest markets are Angola and Brazil but the biggest growth opportunities may lie in China, Canada and the United States.


China, Oz, Portugal, Angola, USA and Brazil? Is it just my imagination?

Portuguese Wine Revisited: Respect! (What a Difference 2 Years Can Make)

The next few columns with be shorter than usual because Sue and I are Portugal. I will be speaking at the 10th Alentejo Vine and Wine Symposium in Évora next week.

We are in Porto today and it is great to be back. I was here in 2014 to speak at a symposium sponsored by ACIBEV. I had a great time (look for a “Flashback Friday” about that visit) and made many friends.

I had a number of striking experiences during my 2014 visit, but one really stands out. I met with a senior executive of one of the major wine producers and he wanted to know what Portugal could do to get more respect in the world of wine — and especially in Portugal.evora1

Portugal has great history, great terroir, great wines — but that greatness isn’t always recognized, he said. He was especially dismayed that Portuguese wine was not better respected within the country. Wine is a strong economic sector in Portugal and an effective ambassador for the country abroad. How do other famous regions get the respect that we lack? What can we do to change this situation?

I did not have answers that day, but it got me thinking (which was the idea, I believe). My investigations turned into a lecture that I have given several times on the subject “Secrets of the World’s Most Respected Wine Regions.”

I don’t want to give away the secrets here, but I can tell you that just a few months after the meeting in Porto the missing respect started to show up, at least on the international stage.evora2

Portugal has received lots of great press in the last two years and the wines have earned a growing share of critical and commercial success. As the image up top indicates, three of Wine Spectator’s top four wines of 2014 were from Portugal. And, as the second image shows, Portuguese wines are winners in the U.S. market. If this isn’t a sign of respect, I don’t know what is.

How about at home in Portugal? Does the Portuguese wine industry get the respect (and favorable government policy treatment) it deserves here? I will have to learn more before answering that.

In the meantime, there is much to discuss about Portugal’s wine industry because the market is evolving. Come back next week for a follow-up column that analyzes Portugal’s shifting wine export environment is more detail.

Speaking of respect …

Hamburgers, Hairballs & Cabernet (Oh My!): Opening Wine’s Overton Window

windowI started thinking about the Overton Window for wine after reading Tim Hayward’s “Food for Thought” column in the Financial Times a few weeks ago (“The steak-and-chips straitjacket” March 26, 2016). Hayward was talking about food but I can’t help thinking about wine.

The Overton Window is a political concept named for think-tank guru Joseph P. Overton (it is also apparently the title of a 2010 political novel by Glenn Beck).

The idea is that at any given time there are policies that the general public finds acceptable and politicians and policy-makers who work within this window will find more success than those on the outside. The window shifts over time as conditions and attitudes change either on their own or in response to the work of political philosophers or entrepreneurs.

Creative Tension

Hayward clearly likes the analytical framework that the Overton Window provides (once you first learn about it, he says, it’s hard to stop thinking in these terms) and his FT column attempts to apply it to the restaurant scene.  Many fine dining restaurants like to define themselves by their creativity, he writes, but they risk straying outside their customers’ Overton Window. It’s a difficult situation.

Add a fancy hamburger or steak-and-chips to the menu, he says, and you’ll make your customers very happy because they will know that they can always find something to eat. But will you lose your identity in the process and become just another place with good steak and chips? But, on the other hand,  can you afford to ignore the economic benefits of providing widely popular “safety” options?

Hayward knows the British restaurant scene very well and he argues that the Overton Window has broadened quite a lot over the years, which has made it possible for creative chefs to provide a wider range of interesting foods. A good thing!

But he reminds us that the window’s “straitjacket” still holds. Wander too far outside its constraints (without that hamburger or other “safety dishes” to anchor you) and you risk being a critical success but a market failure. The most successful chefs, he argues, don’t think “outside the box” (to mix metaphors, but you get the idea), but rather work at the edges of what is generally acceptable, keeping creativity alive if contained.


Like a Giant Hairball?

Hayward’s analysis reminds we of one of my favorite management books, Orbiting the Giant Hairball by Gordon MacKenzie. For MacKenzie, corporate bureaucracy, which defines acceptable policy, is a giant hairball and if you don’t fight against its gravitational pull you will be sucked into mediocrity.

But you need that pull to anchor you. Without the hairball and the discipline it imposes, creative people fly off into the cold reaches of outer space (and chefs, I suppose, fly off to bankruptcy court).

The trick, MacKenzie concludes, it to strike just the right balance and to orbit the hairball rather than zooming off into space or crashing into the hairball’s oily net. I think we all know people who suffered the two sad polar fates as well as some lucky ones who got the orbit balance just right, which I guess is equivalent to working happily and profitably around the edges of the window.

Windows and Hairballs in Action

My purpose in talking about windows and hairballs is to try to apply these flexible concepts to wine much as Tim Hayward has done for food. But before I go there it is necessary to circle back to base a bit. The Overton Window was conceived as a political idea and MacKenzie’s hairball was all about business in particular and organizations generally. Before we apply these concepts to wine, we should ask if they still apply on their home turf?

The political climate here in the United States is chaotic, with challenges from the left (Bernie Sanders), the right (Ted Cruz) and … well, where exactly is Donald Trump coming from? Has the Overton Window of acceptable ideas expanded (as Hayward suggests at one point in his column) to include all of this, which amounts to nearly everything? That’s not a window, it’s more like an amphitheater!

Or maybe the problem is that the population has fragmented and there is no single window any more, but rather a mosaic of windows that don’t really connect. Switching frameworks, has the hairball just lost some mass, so that the orbits are wider and more eratic? Or has it collapsed leaving us lost in space?

Isn’t This Supposed to Be About Wine?

Hayward is interested in how and why the restaurant menu Overton Window has expanded and why some previously exotic items are now clearly in the frame (think sushi, kimchi and kale) while others remain locked out (he cites cerviche, for example). We could ask the same sort of questions about wine. I know that Riesling fans always wonder when a broader audience will discover their favorite wine and move it more toward the center of the window.

Another application would be to look at the choices that wine shops and supermarket wine managers make when they decide which wines to stock and which to leave off the shelves. Some store selections are very conservative, sticking to the most widely purchased SKUs from the best-known makers, while others push the edges a bit.

Perhaps wine stores that go bust are, like Hayward’s über-creative chefs, guilty of pushing too far outside of the window, leaving their customers with an inadequate supply of “safety wines?”

But, inspired by Hayward’s analysis of create chefs and their steak-and-chips dilemma, I am particularly interested in thinking about restaurant wine and the choices restaurants make in compiling their wine menus. Come back next week for some interesting analysis.


I couldn’t find a cool image of an Overton Window for wine, so I used this photo of the Berry Brothers & Rudd window in London when it was decorated with giant corks.This is a memorable image and a reminder that Berry Brothers must understand wine’s Overton Window very well to have stayed in business in their iconic shop at 3 St James’s Street since 1698.

Craft Wine? Craft Beer’s Innovation Edge (and What Wine Can Do About It)

battlePeople in the wine business tend to look at each other and see rivals like in the old Mad Magazine Spy vs Spy comic strip. In the battle for shelf space, consumer attention or critical praise, it usually seems like it is wine versus wine.

But hardly anyone lives by wine alone and these days the biggest competition is often less from other wineries (or wine regions) than from other products like craft beer, craft cider and craft spirits that have captured consumer imaginations. The battle for shelf space is real, but its not the only battle.

Keys to Craft Beer’s Success

Craft beer in particular has enjoyed great success in recent years and many of us see the unexpected fall in demand for wines priced at $8 per bottle and below here in the United States as one consequence of the craft beer boom.

Craft beer has many advantages. The margins can be great, for example, and you are not limited to one vintage per year. You can crank out new batches every week or so and it is possible and even desirable to experiment with seasonal recipes or riffs on classic styles from around the world.

Innovation is hot on the craft beer aisle, with literally dozens of different styles, blends and mixes that are constantly rotating in and out of the market. It is kind of fascinating. Wine comes in a world of assorted grapes and styles, too, but innovation tends to take the form of unusual wine brands or packaging, for example, more than experimental products.

Rocky Wine: Don’t try this at home!

Jamie Goode wrote about the time that Randall Grahm experimented with adding “minerality” to his wine by tossing some rocks to the barrels. There was an interesting effect, Grahm said. The stones added “far more complexity and greater persistence on the palate.” But the health department shut the operation down.

Winemakers are like brew-masters in that both groups are constantly experimenting and trying new things, although not all of them are as extreme as Randall Grahm’s rocky vintage. The brew industry seems to be more open to the commercialization of these products.

Maybe wine can bring more of these experiments to market in small or large lots to add another layer of complexity and interest?  Well, what about the barrels themselves? Barrels come in many types and are used in a variety of ways in wine.There is a history of product and process innovation both with barrels (think Gaia in Piemonte) and without them (the current popularity of unoaked Chardonnay).

Barrels are a source of innovative inspiration in other parts of the beverage market. I have seen oak-aged ales and ciders and I have seen spirits that were aged in sherry barrels, for example. Working with barrels has always been a legitimate if sometimes controversial variation on wine tradition. Maybe we can do more with them?

Jacob’s Creek Experimentscab

Jacob’s Creek, the Australian winery that is part of the Pernod Ricard empire, has released two new wines that explore this notion. They are called Double Barrel Cabernet Sauvignon and Double Barrel Shiraz. The wines are first aged in traditional oak and then they get a relatively brief second aging in used spirits barrels — Irish whiskey for the Cab and Scotch whisky for the Shiraz.

The idea isn’t to make the wine taste like booze — if you want to taste whiskey (or whisky) the obvious thing to do is to taste whiskey (or whisky) — but as with  oak barrels in general, you use them to see what subtle influences they bring to the finished product.

Sue and I were invited to participate in an experiment with these wines and so we received bottles of the two Double Barrel wines plus samples of each wine before the whiskey barrel treatment. We sampled the wines last week with Jacob’s Creek winemaker Ben Bryant via video link-up.

It was interesting to compare the “before” and “after” wines. The “after” Cab (made from grapes sourced from Coonawarra) was richer on the palate than the “before” wine  — the biggest difference was more texture than flavor. The delicious Barossa Shiraz was more dramatically transformed and our clear favorite of the two (I think the Cab simply needs to age a bit longer and both wines were probably still a bit shaken up from shipping).  I thought I could detect a subtle Scotch whisky influence in the Shiraz, but I suspect that was the power of suggestion. In any case it was an interesting experience.shiraz

“I thought this might be just a gimmick,” Sue remarked when we were finished with the tasting. But she concluded that the whiskey/whisky barrel aging did make the wines more interesting and different without fundamentally altering their identities. Something new — which is just what many (but not all) wine consumers are looking for.

The Next Big Thing?

So are whiskey barrels the next big thing in wine? Should you rush to try to corner the market on used Bourbon barrels just in case? (Too late — Fetzer makes a Bourbon barrel-aged Zinfandel called 1000 Stories.)

No. But these wines are an interesting addition to the menu, don’t you think? I see them as a thoughtful attempt to experiment within the tradition of wine much as the craft beer producers have been doing in their space.

Winemakers have long experimented in the privacy of their cellars and labs. Barrel tasting with a winemaker never fails to uncover something out of the ordinary. It would be interesting to see more of these products reach the market for us to try and to provide wine with an even more dynamic presence.

I guess I am calling for the broader commercialization of what you might call “craft wine.” Fresh ideas, small lots, variations on the traditional themes but with some added flair. Not for everyone, that’s for sure, but the craft beer and spirits boom shows that there are many consumers who are interested in a more dynamic concept and some of them are being drawn away from wine.

Beer has made an effort to learn some of the secrets of wine’s strong appeal. I think those of us on planet wine should return the compliment. Done thoughtfully, innovations like Jacob’s Creek Double Barrel can help wine compete with beer for the palates and pocketbooks of today’s consumers — and do it without undermining the fundamental idea of wine.

Craft Beer Raises the Stakes: PicoBrew

There is even more competition coming from the craft beer world! Earlier on the same day as the Double Barrel tasting I attended a presentation by Bill Mitchell, the CEO of a start-up company called PicoBrew, and angel investor Karl Leaverton.gfc_pico_productimage_1

PicoBrew uses advanced technology to allow home brew-masters to create their own professional-quality craft beers, either using their own recipes or those provided by other users or famous craft breweries. Quality, precision and control are selling points, but so is convenience — the magic happens in a sleek web-enabled counter-top brewing appliance. Wow.

But making distinctive beer is only part of the attraction. PicoBrew uses the web and social media tools to allow home brewers to share their discoveries and their stories. Seems to me that the sort of person who would have a geeky interest in fine wine might fall in love with the advanced DIY possibilities of this product.

Beer has made big strides from the bad old days of the 1970s. Cider has surged and craft spirits are very hot. Wine, as I have written before, needs to up its game to compete in this dynamic market environment, but do it without sacrificing the fundamentals that make wine so special.


Thanks to Jacobs Creek and Vanessa Dones at the thomas collective for inviting us to participate in this web wine tasting event.

Five Things I Think I Learned at the Napa Valley Wine Writers’ Symposium

wine-words1Sue and I are back from the Professional Wine Writers’ Symposium at the Meadowood Resort in the Napa Valley and it is time to reflect upon the experience. Herewith some notes and a list of five things that I think I learned about the wine writing business.

Anatomy of an Amazing Experience

The wine writers’ symposium has been going on for about a dozen years and it is an amazing experience. The idea is that you bring together a faculty of experience professional wine writers to teach, coach, mentor and help network a group of rising star wine writer participants. (This year’s “student” group was so well qualified that the student and faculty roles sometimes reversed — a good thing.)

The setting is fabulous. Classes and accommodations are at the Meadowood Resort, which is also one of the sponsors along with the Napa Valley Vintners association and the Culinary Institute of America’s Greystone Napa Valley campus. Bill Harlan of Harlan Estate wine fame co-founded Meadowood and actively supports this initiative. The CIA’s sponsorship derives from its wine education program for budding hospitality professionals.

People come to the symposium to learn to be more effective wine writers and especially to find ways to be more successful on the professional side of things — career development and income generation being important factors. Sue (who was a career and writing coach) and I (one of the speakers) came to learn more about how the wine writing business fits into the wine industry generally and of course to meet all the talented participants.

Reflecting upon four days of intense activity at Meadowood, the CIA Greystone and a tasting at the historic Charles Krug winery, I have come up with a list of five lessons we took away from this experience.

Lesson One: An Industry in Transition

The wine writing business (Jamie Goode would correct me here — the wine communicating business) is an industry in transition. Ironically, although wine is more popular and integrated into popular culture than ever, the number of traditional media outlets for wine writing has declined. There are fewer newspaper wine writing jobs, for example, and fewer newspapers, too.

There is more wine content available to consumers than ever before, but much of it is on the web and provided for free by both professional and amateur authors. Some of the amateurs are highly qualified, of course, but their freely provided content makes earning an income in this field more difficult.

The internet and the move to mobile communications are disruptive technologies generally and the wine writing business is no exception. That said, disruption creates both challenges and opportunities and the key lies in choosing a strategic response.

Lesson Two: How Wine Writers Are Like Actors

Wine writers are a little like actors from an economic point of view.The most commonly repeated line among aspiring actors, it is said, is something like “My name is Robert and I will be your waiter tonight.” Day jobs may suck, but having a secure source of income is very useful. Being an actor is hard. Making a living acting is even harder. Ditto wine writing.

A small number of wine writers do very well indeed! They work very hard and earn good incomes, achieve a certain level recognition and even celebrity. Most wine writers, however, work very hard and scramble to scrape together a living with multiple jobs and non-wine writing projects — the economic equivalent of an actor’s waiter gig.

Even the most successful contemporary wine writers pursue multiple disciplines, however, generating content for newspapers, television, the web and organizing sponsored tastings, wine classes, consumer programs and much more. Jancis Robinson used to jokingly refer to her wide-ranging set of activities as “the empire” although an economist would recognize it as a diversified business model built around a core expertise.

Hong Kong-based Jeannie Cho Lee MW’s “empire,” for example, includes books, university teaching, her food and wine website, a job advising Singapore Airlines on their wine selections, a television series, magazine articles and much, much more.

Support yourself with a single type of work (magazine editor? wine book author?)? Yes, it is done — Eric Asimov, the chief wine critic of the New York Times is an example — but that’s the exception not the rule. Need to create that diversified empire. And then hope for some luck, too.

Lesson Three: No Single Path

There is no single sure path to success in wine writing. Some of the top people in the field are Masters of Wine or Master Sommeliers, for example, but others like Asimov are self-taught. That said, I noticed that a great many of the talented “students” were seeking WSET credentials. The detailed wine knowledge is important, of course, but this is also a way to signal potential clients of serious commitment, which is useful in a crowded and competitive marketplace.

It seems to me that many of the successful writers leveraged specific assets effectively. Jamie Goode was a successful science editor, for example, and the scientific foundation of his writing clearly differentiates his product. Decanter contributor Jane Anson’s deep knowledge of Bordeaux gives her a comparative advantage.

The day of the generalist (I am thinking of our fantastic keynote speaker Hugh Johnson, who seems to know everything about wine) seems to be passing or perhaps has passed as a business model.

Specialization is important, whether by market segment, winemaking region, or wine issue area. But, as noted above, the ability to make connections and to communicate across several platforms is also critical to success.

Lesson Four: Passion is Not Enoughpassion-portugal-red-blend-77x300

The writers we met who seem to have the greatest success share drive and passion, but they are also strategic in the way that they invest their time and other resources, entrepreneurial in seeking out and making their own opportunities, and multidisciplinary. They leverage their core comparative advantage effectively to make themselves valuable to clients and readers, not simply to be more visible to the public.

Let me repeat part of that. They think about their clients and audiences and what they can do to create value for them. Then, of course, they have to persuade their clients of the return on investment and convince them to share some of those returns with them.

More work is needed to measure the value created by high quality wine communications and to distinguish it  from freely available web content, for example. The statistics we heard about low and stagnant “dollars per word” freelance writing rates suggest that  professional wine writing has low value, that its value is not widely appreciated, or perhaps that professional writers are in a weak negotiating position when it comes to writing fees. (Alder Yarrow argued that this is due to an over-supply of wine writers.)

Lesson Five: The Value is There

Ironically, even as the average return to professional wine writing has declined, its importance to the industry has actually increased as the wine industry becomes more competitive with other sectors that compete for sales and attention.

Wine writers tell wine’s story and story-telling is a valuable skill. Consumers do not just sniff with their noses and slurp over their tongues. Lots of things smell good or taste good. The key, it seems to me, is to engage the imagination and take wine enthusiasts on a journey and the people we met at Meadowood and others like them are skilled and valuable guides.

Or at least that’s the lesson I take form the substantial investment made by the symposium sponsors. Napa Valley Vintners, Meadowood and the CIA will  get some direct publicity from the symposium itself (this column, for example) but the real payoff comes down the road as all the participants become more effective in their work and better able to tell the Napa Valley story and the story of wine more generally.

The sponsors actually kicked up the investment a notch this year. In the past most “students” paid symposium expenses while a small number received fellowships to offset cost. This year a new “all fellowship” model was rolled out, with fewer “students,” high admission standards, and full-tuition fellowships. Plans are coming together to build an endowment to sustain the full fellowship model into the future. I like the forward thinking behind this.

There was a lot to absorb at this conference and I am only scratching the surface here, but these are some of the things I think I learned at Meadowood.


Thanks the symposium’s organizers for inviting us to take part and to the sponsors for their generous support of the program. Thanks, as well, to all the Napa Valley wineries who donated the wines we used in classes and the meals and receptions. Shout-outs to so many including especially Jim Gordon, Julia Allenby, and Antonia Allegra.

Sue and I also want to thank Cain Winery for inviting us to an intimate dinner they hosted at Terra Restaurant in St Helena where we had a glorious meal and tasted Cain Five wines from 1986, 87, 97, 98, 2006, 07, 10, 11 and 2012. It was an awesome experience. Thank you!


Say, when is someone going to write a song about wine writing? Try substituting “wine communicator” into the song at the appropriate place and see if it works. Cheers.

Four Faces of Sustainability at the Unified Wine & Grape Symposium

sonomaSue and I recently returned from the Unified Wine & Grape Symposium in Sacramento and we noted several important themes in the meeting rooms, on the trade show floor and in our many conversations with wine industry colleagues. One significant recurring topic was sustainability, which was also on the lips and minds of the people we met last November at the SIMEI meeting in Milan. Here’s a brief report.

Sustainable Sonoma

The week  began with the announcement that the Sonoma County Winegrape Commission had received the Governor’s Award for Sustainability, California’s highest environmental honor. The group, which represents more than 1800 grape growers, set an ambitious goal two years ago — to have 100 percent of the county’s vineyards certified sustainable by 2019. Did I say ambitious? Make that very ambitious!

And yet they seem to be doing it, increasing the proportion of vineyards with third-party sustainable certification from one-third in 2015 to 48 percent this year. Overall 64 percent of the county’s vineyards have had a sustainability assessment and the proportion continues to grow. It is obvious that Sonoma County winegrowers appreciate the importance of sustainability and are making impressive progress.

Will they achieve 100 percent sustainability by 2019? That’s a big goal and complete compliance may be difficult to achieve. But who would have guessed that they could come so far so quickly. I would not bet against them.

Fred Franzia’s Lecture

The next day’s program featured a luncheon speech by Fred Franzia, the head of Bronco Wine Company and Mr. Two Buck Chuck to his legions of fans. Franzia doesn’t give many public speeches and this event sold out quickly. The room was packed with industry executives and winegrowers.  (You might enjoy this article about the speech from the Italian wine press — I love the headline “Un Irriverente Fred Franzia Scalda Sacramento.”)

Franzia’s speech ranged over many topics. He honored important figures in California wine, talked about his own family’s long history in wine, and made some pointed comments about current wine policies. He also announced the sale of the one-billionth bottle of Charles Shaw wine and Bronco’s acquisition of the Petri Wine name from The Wine Group and the return of that name to Bronco’s historic Escalon winery. Petri was at one time the largest winery in the U.S., dwarfing current world production leader Gallo.

Bronco is involved in a number of important sustainability initiatives (for example it recently received a Zero Waste Gold certification), but Franzia’s speech focused on a topic of particular importance to the growers in the audience: water. Franzia noted that many growers in the San Joaquin Valley have been slow to adopt drip irrigation technology to their large vineyards. He explained the benefits of this technology and called upon the group to be better stewards of scarce water resources.

Sustainable State of the Industry

Once again this year I moderated and spoke at the big “State of the Industry” session on Wednesday. Last year all three of us who spoke talked about the importance of sustainability in different aspects of the wine business and the topic appeared again this year, but in a different guise.

Nat DiBuduo of Allied Grape Growers found himself with the unhappy task of telling the audience that it looked like thousands of acres of vines would need to be grubbed up in the San Joaquin Valley. Why? A combination of ageing vines, unmarketable grape varieties, falling demand in the value wine category and higher profits in other crops, especially tree nuts. Not the news Nat wanted to give. He planted some of those vineyards himself and hates to see them go.

Does the perfect storm of changing market dynamics spell doom for winegrapes in the Central Valley? A restructuring is needed, Nat said, but the key is to move the business upmarket to higher quality. There is a growing market for higher quality wine made from better grapes and sustainability is part of that package, he advised. Environmental and economic sustainability are not enemies, they need to be partners in this key winegrowing region.

EcoVolt Waste Water Innovation

Sustainability has many faces and we found lots of them on the trade show floor. The Unified is the western hemisphere’s largest wine industry gathering, so it attracts a diverse crowd, including entrepreneurs working on projects to help wineries that are committed to sustainability to achieve their goals.

We saw a number of interesting products, but the one that especially caught my attention was the EcoVolt Sustainable Wastewater Treatment system from Cambrian Innovation. Cambrian is a biotech company that was spun out of MIT labs in 2006. The EcoVolt product uses a proprietary bio-electric process to remove more than 99 percent of contaminants from waste water (and wineries generate a lot of waste water), in the process producing methane gas, which an integrated co-generation process converts into heat and power. Microbes do the heavy lifting, cleaning the water and producing the gas, and innovative technology brings all the pieces together.

I was particularly interested in the EcoVolt Mini, which is housed in a standard 53-foot shipping container (see image below) and scaled for wineries producing 200,000 to 500,000 cases per year. Bigger units scaled to larger needs are also available. With so much water used in the cellar, the need for products like this is clear.

Four Faces and More

I like that Cambrian’s product addresses several aspects of sustainability — water, power, cost — in this innovative way. If the goal of a sustainable wine industry is going to be reached we are gong to need a lot of faces involved — of regional organizations, growers and winemakers beyond the North Coast and innovators both inside the wine sector and those bringing ideas from other areas.

For a long time it has seemed to many of us that sustainability was often more talk than action. Lots of people talked about sustainability, but real progress was sometimes hard to see. Have we turned a corner? Are we really moving ahead? We saw positive signs in Sacramento.