Wine Book Review: Britain, Imperialism, and the Wine World They Created

Jennifer Regan-Lefebvre, Imperial Wine: How the British Empire Made Wine’s New World. University of California Press, 2022.

Imperial Wine is a serious academic study of how imperial economic, political, and social relations between Great Britain and three of its colonies — South Africa, Australia, and New Zealand — shaped their wine industries and New World wine more generally from the time of the first plantings through to today.

This is an argument that I am glad to see examined in depth. In my books Wine Wars and the forthcoming Wine Wars II I nominate Great Britain as the center of the wine universe, so powerful, I think, is its influence on wine and the wine trade.

Australia and New Zealand were British colonies that developed wine industries that were shaped to a great extent by the ebb and flow of trade with the United Kingdom. Although South Africa and its wine industry have roots in Dutch colonial trade, the decades under British rule had powerful effects.

It is a fascinating study, but I admit that I struggled at times because I really wanted this to be a book about wine first and foremost and the author is really focused on imperialism, with wine used as a lens. I think that authors earn the right to define their works, so I cannot really complain. This is a story that can be told several ways.

Most people will be surprised at the poor reputation of Australian wines in the UK market in the early post WWII period, for example, given how popular they are today. There are many ways to demonstrate this, but the author highlights a lame Monty Python joke that compares and aroma of Aussie wine to the smell of an Aborigine’s armpit, which invites a discussion of imperial racist attitudes in the post-colonial era.

“Some wine lovers might protest that colonialism is a distant historical footnote to the history of wine, and that dredging up colonial history is a buzzkill, a weary intrusion on our enjoyment of wine,” the author writes in the concluding chapter, suggesting that she’s run into people like me before. “Can’t we just enjoy a glass of wine without someone introducing controversy?  Is colonial history designed to make wine lovers feel guilty?” Imperial Wine, the author argues, makes the case that ignoring the history of wine distorts our understanding of both it and the complicated processes that have shaped it.

Fair point. Understanding the forces that conditioned what is in your wine glass, how it is made, and who it is made for deepens the wine experience, don’t you think? And that includes the forces of empire and the long shadow that they cast.

The author’s deep dives into historical documents drew me in again and again. During World War II, for example, Old World wine pretty much disappeared from store shelves, replaced for the most part by “colonial wines” from South Africa, Australia, and Algeria (not a British colony, but a colony nonetheless).  The author traces changing wartime wine patterns though a study of the detailed records of the King’s College off-license store, called the buttery, which provided wine for fellows and sold it to students. Algerian red wine and South African sherry sold well to penny-pinching students, who would turn their backs on colonial wine after the war in favor of the French wines returned to the market.

Imperial Wine teaches wine enthusiasts about the role of empire in shaping the wine world of the past, present, and probably the future, too. And it teaches students of imperialism that the influence of those forces continues even in something as seemingly simple as a glass of wine.

Interesting. Well-written. Thought-provoking. I learned a lot. Did Imperial Wine change the way I think about wine? Yes, at least a bit. Well worth your consideration.

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Curry: A Tale of Cooks & Conquerors by Lizzie Collingham is one of my favorite books about cultural globalization. Imperialism is a strong force in this account (which includes historical recipes at the end of each chapter). I was reminded of Curry when I noticed that Collingham wrote one of the cover blurbs for Imperial Wine. 

Wine on the Nile: Wine Goes to the Movies (and TV)

One of my pet peeves is wine’s lack of impact in popular culture. Celebrity chefs get lots of traction — even fictional cartoon rodent chefs (have you seen the Disney film Ratatouille?). Celebrity winemakers? Not so much.

Wine shouldn’t try to simply imitate food, of course, Watching Michel Rolland micro-oxygenate a tank of Merlot will never be as much fun as watching Julia Child throw together a pot of Boeuf Bourguignon.  If we want to reach potential newbie wine drinkers, I think wine needs to go where they are and to connect in as many ways as possible.

Wine is so often an afterthought. I bemoaned the fact that wine had no particular pride of place in Stanley Tucci’s hit television series Searching for Italy, for example. A wasted opportunity for sure!

Bordeaux on the Nile?

So I am pleased to see the efforts that Bordeaux producer Chateau Malartic-Lagravière, which is working very hard to position its fine wine where it can be seen and appreciated by a diverse audience.  The white wine, for example, appears in the second season of the Netflix series Emily in Paris.  And the red wine is featured in the recently released big-budget 20th Century Studio version of Agatha Christie’s Death on the Nile.

Why Death on the Nile? A press release suggests that the Bonnie family that owns the Chateau connects with the film’s chief protagonist, fellow Belgian countryman Hercule Poirot. Perhaps. But I have to think the luxury setting in which the film’s action unfolds is an appealing frame for a luxury Bordeaux wine.

Consumers need a nudge to put wine on their minds and I congratulate Chateau Malartic-Lagravière for taking the initiative.  Product placement, however, is just one element of a potential initiative to connect wine culture with the interests and lifestyles of today’s consumers.

Wine First, Please!

Sue and I have been impressed for the early efforts of a group producing a public television series called Wine First, for example. The idea, I think, is that when most people go to a restaurant they pick their meals first and then choose a wine. But when YOU dine out, I’ll bet, at least some of you study the wine list first, choose the wine you want, and they pick food to go with it. Wine First.

The series format takes a wine first approach. The hosts visit a wine region (the Mosel, for example), stopping at three wineries to choose wines that captures the essence of each place — plus a regional food ingredient. A local restaurant chef is then challenged to prepare dishes that will highlight the wines — the wines are the star. The local wine producers evaluate the imaginative pairings that result and render a wine first verdict. Sue and I really enjoyed the programs and hope the multinational series comes back for a second season.

So far so good. But there is a lot more work to be done to get wine more clearly on the radar of the next consumer generation. In the meantime, remember that it is not telling the world how wine tastes (or is made) that will be the key to future growth. What’s important is how it makes you feel.

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I thought you might enjoy viewing the trailer for Death on the Nile.

Wine Book Review: Rethinking Wine Market Perspectives

Giacomo Negro and Michael T Hannan with Susan Olzak, Wine Markets: Genres & Identities. Columbia University Press, 2022.

What would you think if you stumbled upon a tasting note for a familiar wine that was written by someone from a very different culture, using different terms and concepts, and set in a different frame of reference? Think of an extreme version of the Chinese wine tasting notes described in a 2013 Wall Street Journal article.

At first you might just be puzzled and scratch your head (being careful not to spill any wine), but then — if the tasting note is a good one — you’d find yourself thinking, questioning what you thought you knew about the wine, and maybe considering it in a whole new way. That was my experience in reading Wine Markets: Genres & Identities.

I come from Planet Economics, so for me a book about wine markets is a book that is rooted in supply and demand. Producers, consumers, price and quantity — these are the fundamental building blocks.

The authors of Wine Markets come from Planet Sociology, so they think about the people and their relationships as much as — or maybe more than — the wine itself. Hence the book’s subtitle: Genres & Identities. A tasting note from Planet Sociology contemplates the same reality but analyzes it in very different ways.

Chapters at the beginning and end of the book lay out the theoretical elements and the terms that go with them. Different readers will react to this material in different ways. The core of the book is a set of three case studies that all readers will agree are interesting both for their stories and for the conflicts they reveal.

The first case study is Barolo, where modernist producers confront those who follow traditional practices, creating two genres within the one appellation. One element of tension is the use of small oak barriques versus large neutral botti grandi, although it a distortion to oversimplify in this way because some noteworthy producers — including iconic modernist Angelo Gaja — use both to good effect.

Brunello is the second case study, where tension arises between those who follow tradition in using 100% Sangiovese grapes and those who favor “super Tuscan” blends that include international varieties. Finally, the authors visit Alsace, where producer identities are at least in part defined along a biodynamic – organic – sustainable – conventional viticulture spectrum. The research proceeds mainly through interviews with the producers, although there is also statistical analysis of some issues.

The stories are told in terms of wine genres, producer identities, solidarity (or lack thereof), the audiences (consumers, critics), and the markets where they all come together. A different way of thinking about wine markets indeed.

For me the Barolo case study, which was the most detailed, was also the most interesting. The Alsace case confused me — which is not necessarily a bad thing — because the authors argue in part that biodynamic producers there are driven by the desire to achieve market differentiation. My experience is very limited, of course, but I have never met a biodynamic grower who struck me as doing it for the money.

Much of the research for the book was completed several years ago and I wish that more of it had been updated. I also wish there was room for case studies from the New World, where appellations are more geographic indicators than prescriptive wine genres. I wonder how the social dynamic analysis would be different from Barolo and Brunello?

Finally, I appreciate this book because it has given me some new ways to think about the natural wine movement, a genre of wine where identity is both strong and hotly contested at times. I am not ready to move from Planet Economics to Planet Sociology in terms of wine market analysis, but I think we can all benefit from ideas that challenge and stimulate as this book does.

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Gillian Tett, an anthropologist by training who reports on the world of global finance, is chair of the editorial board of the Financial Times and an advocate of the sort of cross-silo thinking discussed in this book review. You might be interested in her recent book Anthro-vision: a new way to see business and life.

Build Wine Back Better: “Got Wine?” meets “License to Steal”

“WineRamp” is an important new initiative to try to overcome obstacles to the continued growth in the U.S. wine market. The idea, in simple terms, is that younger consumers aren’t finding the on-ramp to wine that the baby-boom generation discovered back in the day. What’s the problem? Well, it is complicated, of course, and there are many factors at work here.

Got Your Moo-Stache?

But one issue is simple. There are literally thousands of wine brands on U.S. shelves and each one promotes its own products. But no one is telling the story of Brand Wine. WineRamp hopes to fill in that gap.

It is still early days and impossible to know what WineRamp might look like if it gains the necessary industry support. Some people think of it as a “Got Milk?” program for wine. “Got Milk?”, you may recall, was a very popular generic promotion campaign for dairy milk, with television, print, and more components. You might remember the photos of celebrity endorsers with their white “moo-staches.”

“Got Milk?” was successful in raising awareness, but as I wrote on The Wine Economist a few years ago, it could not prevent the slowly evolving collapse of milk consumption in the United States as consumers opted for other products, especially plant-based non-dairy milks. Got Milk? Yes, but increasingly it is made from almonds or oats.

Grass Roots Initiatives

Generic marketing campaigns are inherently top-down projects, but that’s not the only possible strategy. Mobilizing forces at the grass roots level is another option. Neither approach is easy or guaranteed to work. What would a grass roots wine project look like?

“License to Steal” (aka LTS) is the name of the national wine marketing conference, which will be held this year on March 22-24, 2022 in association with the Eastern Winery Exposition in Syracuse, New York. License to Steal? Well, the idea is that everyone brings their best ideas about how to reach consumers and promote wine in a sort of open-source environment where sharing and stealing go hand-in-hand.

I started thinking about License to Steal when Donniella Winchell, the driving force behind the 15-year old initiative, asked me to recommend someone to record a brief “Crypto 101” video for the program. I’ll do it, I said. It will give me a good excuse to do some research and get up-to-speed on blockchain, crypto-currencies, NFTs, and so forth.

Gulliver in Lilliput?

The LTS program includes presentations and discussions that are relevant to all wineries, but especially the ones that I think of as “grass roots” American wine. Some U.S. wineries are huge (Gallo produces an estimated 100 million cases a year) and sell in broad national and even global markets. Gallo towers over the U.S. wine industry like Gulliver in Lilliput.

But most of the 11.300 US and 872 Canadian wineries are smaller — much smaller — producing 10,000 or 5000 or even fewer than 1000 cases of wine each year. These wineries succeed or fail depending upon how well they connect with local communities, forging wine-based relationships one happy consumer at a time.

Each of these Lilliputian wineries is small by itself, but there are so many of them that they can make a difference. That’s how grass roots connections work and it would be a mistake to underestimate their current and potential aggregate impact on wine in American society.

While we are thinking about top-down wine promotion, I think it is important keep the grass roots in mind, too.  LTS is a powerful tool and the dozens of regional and local wine associations and their members. Can they be persuaded to sing a song of wine (with local variations, of course) to win the ear of hesitant consumers? E pluribus unum is a worthy goal.

Lessons from Catena & the Argentina Wine Miracle

The press release begins this way:

MENDOZA, Argentina – February 8, 2022 – Dr. Nicolás Catena Zapata of Catena Zapata winery received the Lifetime Achievement Award at the 22nd Annual Wine Enthusiast Wine Star Awards held last night at the Eden Roc Hotel in Miami. This prestigious industry event recognizes individuals and companies for their exceptional contributions to the success of the wine and beverage alcohol industry.

Dr. Catena’s life in wine is indeed worth celebrating. He was a leading protagonist in what I call the Argentina wine miracle. An economist by training, Dr. Catena was a visiting professor at UC Berkeley in the early 1980s when he was inspired by what he saw happening in California. These were the exciting days that followed the 1976 Judgement of Paris, so there was energy and confidence in the air.

California Lessons in Argentina

Catena took this vision back to Argentina, where he exchanged academic tweeds for vineyard and winery clothes. The family firm, Bodega Catena Zapata, and Argentina’s wine industry in general, faced a dire crisis.

Sue and I visited the Catena Zapa “Pyramid” winery a few years ago and, because I am an economist like Dr. Catena, we were ushered into his personal library. I recognized many of the books because they were the same ones that I was studying in the 1970s and 1980s, when stagflation was a global problem, and the debt crisis was on everyone’s minds.

These were more than academic issues for the wine business in Argentina at the time. Having evolved in the “old world” style to make inexpensive commodity wine for the domestic market, Argentina wineries were caught in a squeeze when inflation pumped up costs at the same time that domestic recession caused demand to slump. Could the surplus wine be diverted to export? Not likely, because the quality of much of the wine was below international standards. Argentina’s economic crisis was a wine crisis, too.

That Argentina wine found the energy and confidence to turn the corner, to make wines of constantly rising quality in the face of daunting headwinds, is noteworthy indeed and Dr. Catena more than deserves his lifetime achievement award for his role in making Argentina a world-class wine producing nation. A miracle? I don’t think it is wrong to apply this term to Argentina’s dramatic transformation.

I think it is important to keep these past achievements in our minds today because the challenges that wine faces, while different from the past, are not so different that important lessons cannot be gleaned. History may not repeat itself but sometimes, as Mark Twain observed, it rhymes.

Dividends from the Argentina Wine Miracle

Argentina is experiencing economic crisis again today, overwhelmed by external debt and internal inflation. Perhaps the single best indicator of the depth of the crisis is this graph of the Argentina peso against the US dollar for the decade 2011 to 2021. Fewer than 5 pesos were needed to purchase a dollar in 2011. The rate was about 15 pesos per dollar when we visited five years later in 2016 — that’s a very substantial decrease in the currency’s value in such a short period of time.

But the exchange rate today is much worse — it takes more than 100 pesos to buy a dollar now. And that’s the official exchange rate. I’m guessing that the peso is much cheaper on the unofficial market. This is what an (official) inflation rate of over 50% a year (even higher than inflation in Turkey!) will do.

Although Argentina’s economy is bouncing back from its covid-induced decline, domestic economic conditions are very challenging — not as bad as in the 1980s perhaps, but difficult indeed.  The uncertainty about what policies will be result from continuing debt negotiations with the IMF cloud the horizon. Argentina wine is not immune to these problems, but it is much better positioned today to ride out the storm. Exports were up in 2021. The miracle continues to pay dividends.

Lessons for the U.S. and Beyond

But the lessons don’t end there. I think it is important for wine business leaders in the United States and elsewhere to study Argentina’s wine history and remember that sometimes it is necessary to radically re-think arrangements to adapt to changing circumstances. “They say that time changes things,” according to one of my favorite maxims, “but sometimes you have to change them yourself.”

In the US, for example, inflation has returned as an economic concern and, for the wine industry, the fact of stagnant demand cannot be ignored. There is no debt crisis at present, but with gross debt levels at record highs and rising interest rates on the horizon, it is foolish to think that cracks in debt markets will not eventually appear. Small increases in interest rates can translate into trillions of dollars of additional interest obligation very quickly with so much public and private debt in play at high levels of risk.

Foreign debt is especially vulnerable because so much of it is denominated in dollars and the dollar is likely to appreciate as U.S. interest rates rise. That’s double jeopardy.

For the wine industry, stagnant demand is a problem that is on the minds of many, just as it was in Argentina four decades ago. The Argentina miracle was to shift from low- to high-quality to escape a race-to-the-bottom scenario. For the U.S., the challenge may well be to produce good quality but more affordable wines to appeal to potential consumers who are put off by wine’s relatively high price compared with other beverages.

I note without comment that Wall Street Journal wine columnist Lettie Teague’s recent column on good $10 wines did not include any U.S. product recommendation. “Sadly,” Teague writes, “I couldn’t find any wines made in the U.S. that fit all my criteria.” That’s pretty much the flip side of Argentina back in the day.

I believe in miracles and in wine’s ability to transform itself without losing its soul. And so I offer a toast to Dr. Nicolás Catena Zapata, the economics professor who became a transformational winemaker and whose miracle offers lessons that are relevant today.

Has U.S. Wine Industry Consolidation Gone Too Far?

Is the U.S. wine industry becoming too concentrated, with just a few big firms dominating the marketplace? That, more or less, was one of the questions we were asked at the press conference that followed the annual “State of the Industry” session at last month’s Unified Wine & Grape Symposium in Sacramento, California.  How would you answer this question?

The query was prompted in part by Mario Zepponi’s excellent presentation about merger and acquisition activity in the wine industry in 2021. Mario is principal at Zepponi & Company, a firm that advises winery and vineyard M&A clients and was very busy indeed last year, when a number of large (for the wine industry) deals were concluded.

How concentrated has the U.S. wine industry become? How competitive is the wine marketplace? The answer you get depends in part on how you look at the data. Wine Business Monthly (which sponsored the State of the Industry session again this year) publishes a report on the U.S. wine industry early in each new year which is required reading. This year’s report appears in the current March 2022 edition, which can be accessed online.

U.S. Wine By the Numbers

Judging by the number of firms competing for retail shelf and restaurant wine list space, the U.S. market is very competitive indeed. For perspective, consider that the WBM report for 2014 found 8,287 U.S. wine producers in total, 3913 in California, 734 in Washington State, 632 in Oregon and the rest distributed across the country. Mississippi was at the bottom of the league table with just two wineries.

Zoom ahead to the just-published WBM report for 2021 and the numbers have jumped.  The U.S. winery count rose by 36% in the intervening years, with 11,300 wine producers in total. California again leads the way with 4804 wineries, Oregon comes second with 877, followed by Washington with 875. Mississippi’s winery count increased to six. The Other Washington — Washington DC — is last with two wine producers.

Looking at the data this way, the U.S. wine industry is very competitive, with amazing growth in number of wine producers for such a brief period of time. The increase in winery count in 2021 was slower than in 2020, WBM reports, but that’s not a surprise given the covid and economic conditions we have experienced.

The U.S. market is actually more competitive than these numbers suggest because imports account for about a third of U.S. wine sales, so thousands of international brands are also vying for buyer attention.

Top of the Table Concentration

But number of competitors is not the only factor to consider when assessing industry competition. Market power matters a great deal and the U.S. wine industry features a number of very large players. WBM reported on the top 30 companies in 2014 and the top 50 companies in 2021 along with the lineup from the first report in 2003 and the lists make interesting reading.

The top five producers, ranked by volume of sales, in the very first WBM report in 2003 were as follows: E&J Gallo Winery, Constellation Brands, The Wine Group, Beringer-Blass Wine Estates (now Treasury Wine Estates), and Bronco Wine Company (followed by Mondavi — now part of Constellation — and Trinchero Family Estates).

The 2014 report produced this list: E&J Gallo Winery, The Wine Group, Constellation Brands, Bronco Wine Company, and Trinchero  (followed by Treasury and Ste Michelle Wine Estates). The current (2021) line-up is: E&J Gallo, The Wine Group, Trinchero, Delicato Family Wines, and Constellation Brands (followed by Treasury and Bronco).

I think you would have to conclude that the top of the U.S. wine table has been very stable, with a good deal of the movement due to transactions within the industry such as Constellation’s acquisition of Mondavi and more recently its sale of many brands to Gallo and The Wine Group. The steady rise of Trinchero (think Sutter Home, Menage a Trois among other brands) and Delicato (Bota Box, of course, and now also the Francis Ford Coppola Winery) is noteworthy.

The 50 largest wine companies (out of the 11,000 total) account the vast majority of sales volume for domestic wines (not counting the imports) and it is easy to see why because firm size is very large. JUSTIN Vineyards and Winery is #50 in the 2021 table but still produces a very substantial 339,000 cases of wine each year. Gallo is at the top of table with a WBM-estimated 100 million case annual wine output. That’s 1.2 billion bottles. Incredible!

It is interesting to look at how production measured by volume of the top three largest wineries has evolved over the years reported here. In 2014, for example, the big 3 totaled over 187 million cases (not bottles) of wine (Gallo 80 million, The Wine Group 57.5 million, Constellation 50 million).  The Big 3 total for 2021 is actually bit less: Gallo 100 million + The Wine Group 51 million + Trinchero 20 million = 171 million total. That is less than in 2014, which could be due to a number of factors including, as I have heard some insider’s comment, a lack of investment in some of the brands involved in the Constellation-Gallo transaction during the long regulatory approval process.

If we assume that the total U.S. wine market was about 450 million cases in 2021, then the Big 3 accounted for about 38% of sales by volume. If imports accounted for a third of total sales, then the Big 3 alone were responsible for 57% of domestic-produced wine sales by volume.

The biggest wine companies are really, really big, but some of the market power has shifted down the line. The 30th largest wine company in 2014 (out of the 30 listed), for example, was Purple Wine Company, which produced 415,000 cases. Number 30 in 2021 is Firstleaf at 700,000 cases. Firstleaf is a direct-to-consumer operation founded in 2016 with more than 75 brands in its portfolio.

What’s Driving Consolidation?

Big is in for U.S. wine and a lot of the bulking-up is taking place in the tiers below the Big 3. What’s driving it? Mario Zepponi presented an interesting perspective in our State of the Industry session. He argued that you have to put wine production in the context of its linkages in the product chain.

A lot of wine is sold in grocery stores, for example, and the top 5 U.S. grocery companies account for about half of total revenues in that sector. Big store chains, with their thousands of assorted SKUs, tend to prefer to work with a small number of distributors in each product segment if possible. So maybe it is no surprise that the top 3 wine distributors account for about 65% of revenues according to Zepponi’s data. Connect the dots here and it is easy to see why distributors might favor large wine companies with broad portfolios.

Big favors big, which favors big. Evolutionary forces point towards increased concentration, even in an industry as fragmented in some ways as wine.

To a certain extent, then, wine consolidation is the result of a process (accelerated by the covid channel shifts) that is affecting retail more generally. Consolidation, in this view, starts at the retail level and works its way backwards.

So has U.S. wine industry consolidation gone too far? It depends upon how you look at it and where you are positioned within the industry — in the Big 3 tier, the broader top 50, or further down the pyramid. And maybe the question should start higher up the food chain with consolidation at the retail and distributor levels. The market sure is competitive even if market power is concentrated at several points.

It is, I am afraid, one of those annoying “on the one hand …” situations that provoked President Harry Truman to ask for someone to send him a one-handed economist.

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Thanks to Cyril Penn and his Wine Business Monthly team for the 2022 edition of their wine industry report. A very valuable resource for anyone interested in U.S. wine market dynamics.

What’s Ahead for the Wine Business? Wine Industry Leadership Conference Next Week

The Wine Industry Leadership Conference, a free group of webinars produced by the Wine Industry Network, is set for next Wednesday (February 9, 2022) at 9 am Pacific time.  Follow this link for more information and to register.

The program is divided into three parts that are relevant to just about everyone in the wine industry.

Session 1: Economic Forecast – What to Expect in 2022 will fill the hour between 9 and 10 with critical analysis of U.S. economic conditions from Sonoma State University Professor Robert Eyler follow by my analysis of some of the implications for the wine industry. I am calling my presentation “Wine and the Big Squeeze,” which may give you some idea of what I see ahead.

The ten o-clock hour is devoted to Session 2: Talent Retention – Keeping A Strong Team Intact featuring commentary by Sandra Hess, Founder / DTC Wine Workshops; Joel A. Miller, Owner & Principal / Chateau HR Consulting; and Karen Alary, Managing Partner / The Personnel Perspective.

Session 3: Successfully Transitioning Your Winery to New Leadership follows from 11 to 12 am and features Greg Brewer, Founder & Winemaker / Brewer-Clifton; Peter Mondavi Jr, Co-Proprietor / Charles Krug Winer; and Mario Zepponi, Principal / Zepponi & Company.

Moderators for the three sessions are George Christie, President & CEO / Wine Industry Network; Stacy Briscoe, Managing Editor / Wine Industry Network; and Kim Badenfort, Director of Marketing Services / Wine Industry Network.

The presentations are being pre-recorded so that the speakers can respond to questions and comments in real time during each session, which promises to make this a more interactive experience than the typical Zoom webinar.

I appreciate the Wine Industry Leadership Conference’s focus on practical business issues facing the industry today and the impressive lineup of speakers. Hope to see you there.

Unified Symposium: Wine and the New Now

These are fast times. I used to think about “getting back to normal” and then I started talking about what the “new normal” would look like. Now I don’t really know what normal is — it’s a “new now” every day.

Crossing the River, Feeling the Stones

Planning for the future in the “new now” era reminds me of the Chinese saying about crossing a river by feeling the stones with your feet. Know where you are going but be sure to take each step one at a time.

I am struck by the degree that the program for the Unified Symposium this year reflects the “new now” of the global economy. The environment has long been a concern, for example, but now there is a timely immediacy that spans the global to the local. The Unified examines the issues starting with Dr. Steven Ostoja’s Tuesday luncheon presentation on “Changing Climate, Extreme Weather and Water Scarcity: What It All Means for the Future of Farming” and extending into sessions on vineyard adaptation, living with climate change, and wild fire smoke issues.

Labor has long been a critical issue in the wine industry, but we often focused on vineyard labor and sometimes, as in Napa, the problem of attracting and retaining cellar staff in a region with sky-high living costs. The labor problem in the “new now,” however, extends throughout the organization, so human resource issues are front and center.

These are just two of the important “new now” issues the Unified will examine this year. Check out the complete program to see what else is on tap. And don’t miss the trade show, which is where new ideas are put into practice.

State of the Industry Now

I will be hosting the State of the Industry session on Wednesday morning and I think you can expect a lot of “new now” thinking from the all-star speaker lineup: Jeff Bitter (Allied Grape Browers), Danny Brager (Brager Beverage Alcohol Consulting), Steve Fredricks (Turrentine Brokerage), and Mario Zepponi (Zepponi & Company). Their collective expertise spans the issues — demand, supply, markets, and investment.

The State of the Industry session looks back at 2021 and ahead to 2022 and beyond but a “new now” problem is understanding exactly where we are at today given the big swings in wine demand, sales channels, and grape harvests that we have seen. It can be hard see through the thicket of short-term events to pick out the real longer-term trends. Prediction is difficult, they say — especially about the future when the present in unclear. But I guarantee that the team will have revealing insights to share.

New Now Sacramento

If you want to get a sense of “new now” maybe the best example of change and adaptation is the Unified itself. It starts with the newly remodeled SAFE Credit Union Convention Center. I haven’t seen it yet but I am told it is state of the art — bigger and better — and safer — than before. I am really looking forward to the new trade show and session spaces.

And then there is the health and safety element of the “new now.” Bringing together thousands of wine industry people during this pandemic and doing so responsibly requires organization, cooperation, and critical analysis.

As Cyril Penn reported recently on WineBusiness.com, the organizers have retained a health data analytics firm to model the Unified from a covid safety standpoint.

Epistemix develops simulations that approximate risk based on venue, audience and anticipated virus levels with proprietary software developed by a team from the University of Pittsburg School of Public Health. The firm partnered with the Exhibitions and Conferences Alliance a year ago and has worked on risk assessments for conferences and conventions in twenty cities. Reiser said Epistemix has been 95 percent accurate in making event projections thus far.

The models take into account the number of attendees and their vaccine and testing status, the prevalence of the covid variants, the mitigation protocols, the varieties of activities that the convention entails, and the various ways that the groups are likely to mix.

The modeling indicates Unified’s masking and vaccination/testing policy at the newly-remodeled Sacramento Convention Center will create a controlled environment with an expected case rate of one in ten-thousand, according to Lindsey Solden Reiser, PhD, Managing Director of Professional Services for Epistemix, Inc. That modeling assumes 12,000 people attend Unified.

If the projections are correct, the convention will have a much lower expected case rate than Sacramento itself, which has a projected rate of eight cases per ten-thousand persons.

Wine and the New Now

The point is that the new now of trade shows and conventions is very different from the old normal, where people like me mainly worried about mundane things like whether the slide-advance “clicker” would work for the PowerPoint presentation.  I am sure I never gave a moment’s thought to the idea that data modeling of pandemic spread would be needed or desired. But here we are now.

And I think the wine business is in the same situation. We need to analyze the new now and to try to understand it, but without assuming that it will somehow revert to the old normal or remain fixed in place as the new normal, either.

Better take off your shoes and socks. Time to get your feet wet.

Scratching the Surface of Sicilian Wine

I was intrigued when we were asked if we’d like to sample wines from a Sicilian cooperative winery. The history of Sicily’s wine industry — and the role of cooperatives within it — is a roller-coaster tale and such sagas in wine do not always have happy endings. I was thirsty to learn more about the situation today.

I learned about the history of Sicily’s wine sector from The World of Sicilian Wine by Bill Nesto MW and Frances Di Savio (see the Wine Economist review here). Wine in Sicily has been buffeted by a combination of shifts in the external markets and changing domestic incentives. It is no wonder that cooperatives arose to help growers navigate the ups and downs and gain a measure of control over their own destinies.  Cooperatives spring up in times of crisis, but it is their ability to adapt when conditions change that is most important.

Incentives Matter

Sometimes the economic incentives the cooperatives and other wine actors faced favored quality, but all too often quantity was the dominant strategy. This was particularly true during the years when EU wine policy unintentionally encouraged over-production of low-quality wines with no obvious market potential. These unsalable wines, the source of the famous EU “wine lake,” were bought up and distilled into industrial alcohol, a process that was not sustainable in economic, political, or environmental terms.

The wine lake days are gone — EU incentives now favor market-driven wine production — and the wines have changed faster than their reputations in many cases. Not all wineries have raised their game, however, and that inconsistency is a headwind.

The wines we sampled were from the Cantine Ermes cooperative, which was founded in 1998 in the Belice Valley in northwest Sicily. The cooperative is very large with 2373 members farming more than 12,000 hectares and operating 11 winemaking facilities.  In total Cantine Ermes produces 11.5 million bottles annually, which are sold in 29 countries around the world. Does this surprise you? Cooperatives are important in Italian wine, more important than most people realize.

Beyond Low-Hanging Fruit

One criticism I have heard of many Italian cooperatives is that they cut their own throats by focusing too much on bulk wine and private label products — they take this low-hanging fruit and fail to build the brands that might yield higher margins that would improve their economic sustainability.

Some of the deep dark red wine made in Sicily, for example, is sold off to be blended with lighter Italian reds to give the result more body, color, and alcohol — a practice that has been going on for a long time. Cantine Ermes gives attention to several brands, however, including the Vento di Mare wines that we sampled.

Vento di Mare means sea winds and so it was inevitable that we would ask our friends R and M to sample the wines with us. Their visit to Sicily was punctuated by gale force sea winds that nearly blew them off the island and caused sea foam to pile up on the shoreline like drifts of snow.

The three wines we tasted were screwcap-topped bottles of Grillo DOC, Nerello Mascalese IGT, and Moscato Frizzante that retail for about $12 here in the US — right about the center of the retail wine wall in today’s market.  The Grillo had nice varietal flavor and good balance. It seemed very versatile and would pair with many dishes as well as on its own. It was probably our favorite wine.

The red Nerello Mascalese was more intense and called out for a bold food pairing. Nerello Mascalese is the most-planted red winegrape in Sicilty according to my sources, and it was easy to see how it could be the foundation of a number of interesting blends as well as a single-variety wine.

The Moscato was fizzy and slightly sweet. Just 10.5% abv, the wine has a secondary fermentation for two months in an autoclave and then ages another two months on its lees. Aromatic (think orange blossoms) and nicely balanced. Like the Grillo it would work in a number of situations. Very pleasant indeed.

Sicilian Wine Ambassadors

We were impressed with the Vento di Mare wines and a bit surprised at the affordable entry-level price point. Other Cantine Ermes brands probe the higher reaches of the wine wall. I hope the attractive packaging and price point encourage consumers to give these wines a try (and that some restaurants see the potential for wine-by-the-glass sales). These wines are good ambassadors for Sicily and its cooperative wineries.

Since we aren’t able to travel to explore the wine world these days as we did in pre-pandemic times, we find it useful to focus on invitations like the one we received from Cantina Ermes. Clearly we have just scratched the surface of the wines of Sicily and the progress of Sicilian cooperatives, but we are encouraged, nonetheless. These are good wines that chart a path out of Sicily’s quantity-driven past towards a more sustainable future.

A Toast to Ferrari Trento & the Year of Sparkling Wine

2022 is here and a rear-view mirror look at 2021 reveals a number of interesting wine trends. High on the list of highlights is the surge in sales of sparkling wine.

It is conventional wisdom that wine consumption is occasion-driven. Generally packaged in a multi-serve 750 ml bottle, many consumers need a reason to pull the cork or twist the screwcap. (There are exceptions — I have friends who insist they need no excuse at all …)

Time to Pop a Cork?

Sparkling wine is even more occasion-driven here in the United States, where it is often reserved for special celebrations such as birthdays, weddings, anniversaries, and so forth. This fact was bad news for sparkling wine when we entered the time of covid in 2020 because those festive gatherings disappeared or were in any case much smaller. The spaces we think of for those celebrations such as restaurants were greatly diminished in number and scope. Sparkling wine sales took a big hit.

So one of the pleasant surprises of 2021 is sparkling wine’s rising sales volume in a relatively stagnant overall market.  Part of this is due to re-opening of on-premise venues where friends and family can gather over bubbles. But I think there is something more going on.

Consumption may still be occasion-driven, but it seems to me that the occasions have changed in at least two ways. First, given the impact of covid restrictions, it seems like many have opened themselves up to sparkling wine’s ability to brighten any day and not just Hallmark card celebrations. Thanksgiving at the Wine Economist household, for example, featured a different sparkling wine on each evening of the extended weekend. Bubbles work nicely with the rich food and they can sure elevate leftovers!

To Champagne … and Beyond!

A second change is that the sparkling wine spectrum, which starts with Champagne and then fans out in all directions in terms of style, grape variety, and origin, has broadened. Prosecco’s great pre-pandemic success has continued, but there is more to it than that.

An unlikely place to observe this important trend is on the victory podium of a Formula 1 race, where drivers have for some years now celebrated by gulping down and fiercely spraying jeroboams of Champagne.

This season, however, the wine of choice wasn’t from France (although it was made from the same grape varieties using the same traditional method). It came from the mountain vineyards of Trentino in Italy and was made by Ferrari —  Ferrari Trento, the Trentodoc wine producer, not the Modena-based maker of the sleek red race cars with the prancing horse badge.

Ferrari Trento is one of the world’s leading sparkling wine producers. Earlier this year it was named  Sparkling Wine Producer of the Year at the Champagne & Sparkling Wine World Championship.  The brand is known throughout Italy and beyond. Indeed, Wine Intelligence named Ferrari the most recognized wine brand in Italy. That’s wine brand, not just sparkling wine brand.

When wine lovers think of sparkling wine in Italy, Ferrari Trento is on their minds (along with Prosecco maker Bisol 1542, a sister winery in the Lunelli Group). Ferrari Trentto exports 15% of their production to over 70 countries (the US, Germany, and Japan are the top three export markets). Italy’s domestic market accounts for 85% of sales.

Taking Ferrari for a Test Drive

We have been meaning to visit the Ferrari Trento headquarters for several years, but it just never happened and now with covid protocols the trip is postponed again. So Sue and I jumped at an invitation to participate in an online media tasting event with Marcello Lunelli, Ferrari Trento’s chief winemaker. We were sent three wines: – Formula 1 Limited Edition NV blanc de blancs, Ferrari Perlé 2016, and Giulio Ferrari Riserva del Fondatore 2008. All three wines are 100% Chardonnay hand-picked from high-elevation mountain vineyards in the Trentodoc zone. Super wines, but very different.

The NV Formula 1 spent 38 months on yeast but was noteworthy for its freshness. It’s the wine that new F1 Champion Max Verstappen can be seen chugging from the big bottle in the image above. Bone dry and refreshing — that’s my tasting note. It is too good to gulp down like that and I hope McLaren F1 driver Daniel Ricciardo doesn’t insist on a “shoey” — drinking the wine from his own sweaty shoe — the next time he’s on the podium.

The Perlé wine is a step up the ladder in terms of grape selection and winemaking — the wine rests at least 50 months on yeast. What struck us about this wine were its savory notes, which called out for food. It paired nicely with schnitzel and salad. About a million bottles are made each year, a significant quantity given that the entire Trentodoc appellation accounts for about 20 million bottles of sparkling wine each year.

The Giulio Ferrari Riserva del Fondatore is the summit for Ferrari Trento, with grapes from a special vineyard and aged on the yeast for at least 10 years. I admit that I haven’t had the nerve to pop the cork on this wine yet. It may be that everyone is more casual about sparkling wine occasions now, but this wine seems to demand a serious occasion, especially given its aging potential.

The Year of Sparkling Wine

It was fascinating to hear Marcello Lunelli talk about his wines and winemaking in the Trentodoc zone. The mountain environment presents challenges, of course, but also opportunities, he noted. The winegrowers expect climate change to increase growing season temperatures, for example, which can be mitigated to a certain extent by establishing new vineyards at even higher elevations.

Lunelli recognizes that wines like his are luxury products and you can see it in the glass, the bottle, the presentation. Given this, you might be puzzled at the images of Max and Lewis and the other F1 drivers chugging Ferrari Trento wines and spraying each other and the crowd. How does this make sense given the wine’s luxury cachet?

Well, I think it might be one of the many reasons why 2021, Ferrari Trento’s first year with Formula One, is my Year of Sparkling Wine. F1 is a global phenomenon and Ferrari Trento’s place on the podium sends a strong message to F1’s vast global audience about sparkling wine in general and wines from the Italian northeast in particular.

So a toast to 2021, the Year of Sparkling wine, and to Ferrari Trento and all the other producers who have made up appreciate the beauty of bubbles to enrich our lives.