Wine, Recession, and Coronavirus: This Time is Different?

March 17, 2020 By Mike Veseth in coronavirus, recession, wine, wine markets, wine tourism 8 Comments

94528e9a-5845-4871-bef5-3285eca66dd5 Last week’s Wine Economist column was a working draft of my analysis of how the coronavirus pandemic might impact the wine industry. One focus was on the possibility of a recession in at least some parts of the world and slowing economic conditions generally.

An economic downturn would certainly impact the wine industry. Wine is, after all, a discretionary good for most consumers. I haven’t heard of anyone filling their Costco wagon with wine the way they have done with toilet paper, although I have seen reports of people stocking up for an anticipated quarantine period. People don’t stop drinking wine during times of economic uncertainty, but they do buy less and many scan the shelves more intensely looking for lower prices. The coronavirus alters the menu of wine-drinking occasions, which will have an impact, too.

Rising Recession Probability

Recessions now seem very likely in parts of the Eurozone (the three biggest economies — Italy, Germany, and France are all on the brink). A recession in Japan and perhaps Australia is also likely. Economic growth is projected to fall in China and a insiders are thinking the unthinkable — that the economy could not just slow down, but actually shrink as manufactured exports and domestic consumption both fall. Data on the first two months of the year paint a dark image.

Indicators are flashing red here in the United States, too. The stock market’s long bull run ended last week when equity prices fell by a total of more than 20% from their all-time highs. The Treasury bond market has been under intense pressure and a liquidity event cannot completely be ruled out. Corporate junk bonds are increasingly suspect as investors dump their riskiest holdings to cover loses elsewhere.

Significantly, we have seen truly historic economic interventions designed to head off economic collapse. The Fed’s $1.5 trillion liquidity injection is one example and Sunday’s announcement that it cut its benchmark interest rate target to near zero while also lowering the discount rate is another.. Yes, that’s trillion and zero. Quantitative easing is back, too, in a very big way.

President Trump’s national state of emergency declaration and the follow-up economic stimulus package are also noteworthy. The German government announced an economic stimulus “bazooka” and the end of their zero deficit policy. The list goes on. Some officials say they aren’t really worried about a recession. But it is obvious that they are.

Global financial markets opened with a thud on Monday following the Federal Reserve’s surprise announcement, dropping dramatically on the economic stimulus news and ended the trading session down more than 12 percent. Markets are forward looking for the most part and the big economic actions taken around the world seem to have used up all the ammunition to fight a recession foe. What’s left in case things get worse? I wonder where the markets will be when this column is automatically published early Tuesday morning?

cavatappi Meanwhile, borders are closing, shutting down the flow of people and some services between countries while quarantine measures increasing limit activity within them. Spain has followed Italy into lockdown and other countries seem likely to adopt containment policies too.

The impacts are both global and local — a recent Financial Times article reports on the small business situation in Seattle, home of the first major U.S. outbreak.

Economic forecasters have raised the probability of a recession here in the U.S., although estimates vary and depend on many factors. If you take each sector into account, as the Wall Street Journal did over the weekend, the lost sales and incomes add up quickly. And then you have to factor in the impacts that don’t show up in the headlines. You know something’s really wrong when the NBA, NHL, Champions League, March Madness, SxSW, and Formula 1 all cancel or postpone events.

So the wine industry needs to prepare for the recession that may already be here in a practical sense (technically it takes two consecutive quarters of economic decline to meet the definition of a recession). But this recession is likely to be different from the financial crisis of 2008 or the dot com bust before that. It is important to be ready for what’s happening now and not prepare to fight the last war.

Past is Prologue?

There are too many potential impacts to attempt a comprehensive analysis here, so let me focus on just one area of concern: shifting patterns of direct-to-consumer sales.

Demand for wine fell significantly during the Great Recession and a lot of our discussion was about trading down. Consumers kept buying wine, but they moved down a shelf or two some of the time to save money. And they shopped the online discount sites where upscale wineries tried to quietly get rid of their excess inventory.

One of the main lessons that we learned from the Great Recession was the importance of direct-to-consumer sales and the power of the tasting room and wine club to generate margins when managed properly. Wine businesses made direct sales a bigger part of their strategy. Tasting rooms, wine clubs, personalized service — right down to that birthday phone call. Cooper’s Hawk, a surprisingly large wine business built around a tasting-room themed upscale casual restaurant chain, has nearly 300,000 wine club members. Amazing.

One thing that is different about today is that potential consumers seem to be shunning retail spaces as “social distancing” practices are adopted. Tasting room sales are down significantly, according to some reports, and Washington state wine leader Chateau Ste Michelle closed its facilities to visitors. In California, the government has suggested that tasting rooms and other non-essential businesses temporarily shut their doors.

As more and more people are tested for the coronavirus there are likely to be staff shortages, too. This isn’t just wine’s problem, but it is a problem because a revenue stream than many wineries rely upon is interrupted. What to do?

Is There an App for That?

Other retail sectors are looking to the internet to help them connect with consumers who hesitate to make physical contact and this seems to be a smart move for wine businesses, too. The cornoavirus is only going to make web-based storefronts and mobile ordering a bigger element of any wine business strategy. But web sales are different and it is not enough to simply stock your internet shelves and open the virtual door. You are going to need hooks to attract and hold customers.

Selling on the web invites quick and easy price comparisons. Price, which is always a factor, may become even more important since buyers are not in your tasting room to receive a warm welcome, personal attention, and samples of that reserve wine you keep under the counter for special guests.

Many businesses that entered the pandemic in weak shape will be victims of falling demand, supply chain interruptions, or financial collapse. We have already seen notices in Seattle of restaurants that are permanently shutting their doors.

Everyone hopes that the coronavirus pandemic will fade in a few weeks or months. Even if we are lucky and that timeline holds, a lot of economic damage will have been done and we will start to know if consumers will go back to their old patterns or if (and how much) things have really changed. What will we learn from this crisis? How will it shape longer term behaviors and strategies? Lots of questions and not yet many answers.

If you are looking for clues about what might happen in the U.S. and European markets when the coronavirus threat starts to pass, I recommend reading a recent Rabobank report about anticipated changes in the Chinese wine sector. China was hit first and hardest so far by the coronavirus and its experience might provide insights about what comes next in other regions.

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About that bottle of “Coronavinus” wine shown above. Apparently it is real. I found it on a Spanish website selling for €19.

The Trouble with Being King of the Hill

July 16, 2019 By Mike Veseth in Italian wine, wine, wine history, wine tourism 4 Comments

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For a long time Collio and its neighboring regions in Italy’s upper right-hand corner have been King of the Hill when it comes to Italian white wines. It started in the 1960s when Collio, which had long been known for its excellent hillside terroir, abolished the old share cropping system, which favored quantity over quality, and got a head start on many competitors in the adoption of modern temperature-controlled white wine fermentation practices.

Exceptional grapes were combined with winemaking techniques that preserved fruit and aromas. The results were some stunning mono-variety white wines — Pinot Grigio, Sauvignon Blanc, Chardonnay, and native varieties, too — that established the region’s reputation.

The Trouble with Hills

As I noted last week, Sue and I have been coming to Collio since 2000 and the wines have gotten more and more interesting — strength built on strength. But the trouble with being King of the Hill is that you must constantly defend your position against determined competitors and this has been Collio’s challenge.

Collio’s distinctive terroir is impossible to copy, but other wine regions have worked hard to reel in Collio’s early lead in vineyard and cellar practices. Now there are excellent white wines from many regions of Italy north, south, east, and west. Some of the Vermentino di Gallura wines we tasted recently in Sardinia, for example, were absolutely world class.

And of course there are competitors from all over the world to be considered starting of course with New Zealand, which was only a fly speck on the world wine map back in the 1960s. There is a lot of competition today for the title of King of the White Wine Hill.

Grape Expectations

Collio’s challenge is ironically made more difficult today because of its focus on mono-variety wines. Pinot Grigio was easy to understand in the early days compared with wines identified by appellation. That was an advantage. But today there are Pinot Grigio (and Sauvignon and Chardonnay) wines from all over the world and the Collio brand is perhaps overshadowed in New World consumer minds, which often focus on grape variety more than region.

The focus on grape variety unexpectedly puts Collio in directly competition with New Zealand, California, Australia, France, and a host of other regions. The advantage of a hilltop position is diminished. The fact that Friulano, the region’s signature native wine grape, has been serially rebranded (Tocai, Tocai Friulano, Friulano) under orders from the intellectual property police hasn’t helped.

So Collio is facing increased competition from other parts of Italy and other parts of the world. There is also more competition within Friuli itself. We heard reports of massive new plantings out on the plains that threaten to flood the market with cheaper wines and drive down precious margins. They won’t be Collio appellation wines, but they will still compete. Yikes!

Collio Bottleneck

There are as many responses to the the increased competition as their are growers and producers. One important initiative is Collio Bianco, a signature white wine blend that producers hope can help establish the region’s brand more concretely in consumers minds. Think Collio (not just the grape varieties) for exceptional white wines .

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The official definition of Collio Bianco has evolved. Once this wine was a simple field blend. Then it because a loosely regulated blend of native grape varieties that was noteworthy for its lack of distinctiveness. Kitchen sink wine, made with leftovers not used in the favored varietal bottlings.

More recently Collio Bianco was been defined as a white blend made from just about any mixture of native and international grape varieties. The idea is to give winemakers freedom to make the very best wines and have them bear the Collio label and fly the region’s flag.

A special bottle shape was created to further distinguish this wine from others on the shelf. What do you think? The longer, thinner neck requires a special cork. Choosing this bottle (it is a voluntary program and the special bottle is not required) is a commitment to promoting the region’s brand as well as the individual producers’ products.

One Blend to Rule Them All?

Our hosts arranged for our press group to taste 24 examples of Collio Bianco. Vintages ranged from a 2013 (Primosic Klin — it was spectacular) to several 2018s (bottled earlier than usual especially for Vinitaly and maybe not at their very best when we tasted them).

Some of the blends focused on the native grape varieties. Gradis’ciutta, for example, presented a Friulano, Malvasia, Ribolla Gialla blend. Others producers combined native and international grapes. Venica & Venica’s Tre Vigne blended Friulano, Chardonnay, and Sauvignon. Ronco Blanchis blended Friulano, Malvasia, Sauvignon, and Chardonnay. Marco Felluga’s Molamatta combined Friulano, Pinot Bianco, and Ribolla Gialla. It was, as you might guess, a pretty interesting experience, especially since we tasted the wines blind.

The Weight

The question now is what is Collio Bianco and can it bear the weight of expectations? The wines we tasted showed high quality but, given that they come from different producers, sub-regions, and vintages using different grape combinations, we struggled to find any other defining characteristic. And I guess that was the point of the exercise. Only after the fact did I realize why the tasting was titled “Characterized by not being characterized.”

So Collio Bianco wines have quality and they are diverse. Each is a bit different from the rest and consumer experimentation is richly rewarded. This is surely something, especially since the wines from some other regions sometimes seem to all taste alike. But is it enough? I’m not sure.

The good news is that many Collio producers recognize that the challenge of being King of the Hill and they have determined that quality and distinctiveness is the right response. The region also benefits from a consorzio organization with strong leadership and, just as important, pretty good follower-ship — not something that we always find. The greatest mistake would be to rest on past accomplishments, ignoring the competition’s gains, or to think in terms of quantity instead of quality. That’s the fast track from the top of the hill to the bottom.

Small is Beautiful? Scratching the Surface of Pennsylvania Wine

May 21, 2019 By Mike Veseth in wine, wine history, wine markets, wine tourism 3 Comments

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

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

A Wagnerian Vision

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

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

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

1683 And All That

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

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

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

Finding Wine at Penns Woods

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

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

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

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

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

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

Small is Beautiful

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

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

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

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

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

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

State of the Art? Aussie Wine Tourism Invests in Asia & Digital Strategies

May 30, 2018 By Mike Veseth in Australian wine, wine, wine tourism 1 Comment

unwto Wine tourism is an increasingly important element of wine marketing and sales as both authenticity and identity grow as ways to differentiate products in today’s incredibly crowded and competitive global market. Nothing like the personal experience that wine visitors often receive to turn customers into ambassadors.

Of course wine tourism does more than sell wine because tourists spend time and money on food, lodging, local crafts, and more. With proper planning and broad local participation (which doesn’t always happen), wine tourism can be an engine of sustainable rural development. Or at least that’s the idea behind the United Nations World Tourism Organization (UNWTO) global wine tourism conference, which will be held this September in Chisinau, Moldova.

So wine tourism is on my mind and I was therefore excited when I received an email from Wine Australia about $7.4 million in grants to support 21 regional wine tourism initiatives. That’s a lot of seed money — what do they hope to grow? And how?

The grants range from the relatively small and focused projects ($20,000 to digitalize the Canberra district’s wine map and translate it into additional languages) to the fairly large and ambitious initiatives (grants of $250,000 each to McLaren Vale, Adeliade Hills, Swan Valley, and Barossa Valley wine growers associations).

The Swan Valley project caught my attention because it appears to be the sort of focused multi-level, partnership-driven approach to regional development through wine tourism that I think often works best. Here is a summary of the grant:

Singapore Visitors to Swan Valley: establish a consortium of industry, government and academia to work collaboratively on: an audit of existing services/products, up-skilling of tourism operators and development of tourism products, with a strong focus on the Singapore market.

There are two themes that run through the Australian projects chosen to receive these wine tourism grants. The first is a focus on Asian tourists and especially Chinese tourists, with Hong Kong and Singapore also in the frame. The Geelong Winegrowers Association recognizes (as do many others) that a successful program for Chinese wine tourists means more than opening the cellar door. Here is the description of their grant project:

China ready – developing regional and operator capabilities to attract international tourism and increase average spend: development of regional digital and promotional assets; dedicated content for the Chinese visitor to be used across the digital platforms (including WeChat and website) and China-ready workshops encourage collaboration between wineries and tourism operators.

Getting “China Ready” is an important goal for many international wine destinations. When I checked in a few years ago there were only a small handful of Chinese language speaking winery guides in Napa Valley — most wineries were far from “China Ready” then.

Chinese visitors are especially important for Australia. Proximity is one factor, of course, but wine market strategy is another. China is now Australia’s #1 wine export market, surpassing both the U.S. and the U.K.

The second theme I see in the Australian grants is an emphasis on digital technology. No surprise there: people spend more and more time fiddling with their smart phones. It seems like screen time is replacing face time everywhere. If you want to get on wine tourists radar, you need to get on their screens first.

There are a number of interesting initiatives on the grant list ranging from simple websites (in multiple languages, of course!) to augmented reality and virtual reality tours. Riverland Wine’s project, seeks to use technology to stir interest in a region that is less famous than the Barossa or Hunter Valleys.

Riverland on the verge: international market research and development of virtual reality (VR) content to give international visitors virtual tours of Riverland wine attractions from local wine centres.

Most of the grants will support marketing projects, as you might expect. I am particularly interested in the ones that also seek to shape what visitors do once they arrive and how those activities can support sustainable rural development projects like those we will discuss in September at the UNWTO conference in Moldova!

Congratulations to Wine Australia on its 21 wine tourism initiatives. I look forward to learning more as the programs unfold.

Wine Tourism Challenge: Giving City Visitors a Taste of the Wine Country

January 30, 2018 By Mike Veseth in Washington wine, wine, wine tourism 5 Comments

The most famous explanation of international trade is David Ricardo’s Theory of Comparative Advantage. England can make both cloth and wine and so can Portugal, but they will both gain if England specializes in cloth and trades it for Portuguese wines on the basis of each country’s relative efficiency of production.

Divine Will?

There are other trade theories if you aren’t satisfied with Comparative Advantage. One of my favorites is what you might call the Divine Will theory of trade, which holds that God distributed people and the stuff they want and need much differently so that they would be forced to trade or else do without. And trade, the theory holds, brings people together peacefully as Divine Will intends.

I hesitate to invoke Divine Will, but it certainly is true that the wine trade throughout history has been driven in part by the fact that population centers where wine is consumed and vineyard regions where wine is produced do not always coincide.

Getting the wine to consumers is a technical (and, because of taxes and other regulations, legal) problem that has been solved for better or worse over the centuries. The vast wine wall at your local upscale supermarket may not prove Divine Will but it certainly is an impressive achievement.

The growing industry of wine tourism, however, turns the problem on its head. Now the issue is how to get people to the sometimes far distant vineyards so that they can enjoy the experience. Back when wine tourism was just about cellar door sales this was a relatively modest problem, but today wine tourism is an important industry with economic multiplier effects that extend beyond the tasting room.

How do you give consumers a taste of the wine country experience if they are unable to get to wine country itself?

Real and Virtual Reality at Brancott Estate

I discovered one possible solution in an interesting article on the VeeR VR Blog. Marlborough’s Brancott Estate, which is part of the Pernod Ricard wine empire, partnered with Found Studio to create an experience of the “Red Shed,” named for the estate’s famous big red building that is the program’s home base (see video above).

Virtual visitors don VR headsets and can explore the vineyards and the shed and — in a rather remarkable innovation that I have not yet tried — actually sense something of the wines through scents that the headset releases at key moments. This prepares participants for the “real” reality experience of tasting the wines that follows the VR exploration.

This is obviously a pretty complicated way to bring wine country to the city or anywhere else and at this stage it probably risks becoming as much or more about the technology as the wine itself. But it also has the potential to surprise and delight in magical ways. Is this the wine tourism of the 4-D future? Probably one aspect of it and a glimpse of what the future might hold. Stay tuned — this could be pretty interesting.

Woodinville Wine Cluster

We found a second very interesting approach in Woodinville, Washington, which is located a short drive from Seattle and is a major wine tourism destination. There are precious few vineyards here (a few demonstration vines in front of Chateau Ste Michelle and a small Pinot Noir and Chardonnay vineyard at Hollywood Hills Vineyards). But there are more than 100 wineries and tasting rooms, forming a rather impressive wine industry cluster and wine tourism opportunity.

The wineries, following the production model set by Chateau Ste Michelle in the 1970s, truck grapes or grape juice over the Cascade Mountains from the Eastern Washington vineyards and make and package the wine close the market rather than close to the farms. Fast, efficient, refrigerated transport helps assure high quality raw materials and excellent final product. Some of the wineries are showcases like Chateau Ste Michelle while others are working spaces in the warehouse district. Taken together they made a successful industrial cluster.

Tasting rooms began to spring up alongside the wineries when, a few years ago, Washington law was changed to allow wineries to have off-site sales rooms in addition to their traditional cellar door facilities. Wineries based in the Yakima Valley, Red Mountain, the Walla Walla Valley, and elsewhere rushed to open tasting rooms in Woodinville, creating the wine tourism destination you see now.

Sue and I were accompanied by our friend Hermes Navarro del Valle, who is an expert on the global tourism industry with a special interest in wine tourism. It was interesting to see Woodinville through his eyes. We began our visit at Chateau Ste Michelle, which has recently opened a new visitor center that I will talk about next week.

Then we moved on to two of the several small wine tourism clusters, each of which features cafes or restaurants as well as a selection of tasting rooms. We stopped for lunch, for example, at The Bistro at the Hollywood Schoolhouse, a casual, friendly place with good food and a nice wine list. Then we walked a few steps to visit one of the half-dozen or so nearby tasting rooms. I wanted Hermes to taste the wines of Amavi and Pepperbridge from Walla Walla. especially and Amavi Syrah and the Pepperbridge Trine, which is one of the “Around the World in Eighty Wines” selections.

Hermes was excited by the possibilities he saw. If a tourist could get from Seattle to Woodinville, there were lots of eating and tasting options — easy to spend a day here learning about the wines. But he quickly focused on the problem of local transportation — getting around between and among the different winery and tasting room clusters was going to be problem. There needed to be some sort of shuttle that would circulate around the wine routes, he said. A good public-private investment for the local government, Hermes thought.

We glimpsed how that might develop when we moved on to a nearby cluster for our next visit. This space is anchored by a popular wine-themed restaurant called Purple and featured eight or nine tasting rooms with more just across the road.. We started at Fidelitas, which is one of our favorite. The tasting room manager turned out to be Will Hoppes, son of winemaker Charlie Hoppes, so we felt very much at home. Fidelitas is located on Red Mountain and we enjoyed sampling wines from the estate vineyard as well as Quintessence and Champoux vineyards.

As we settled into tasting we started chatting with another visitor, Mark Pembrooke, who is CEO of W3 Tours and may be the solution to the local transportation bottleneck that Hermes diagnosed. W3 Tours provides a variety of winery shuttle services in the Walla Walla Valley and Mark was in Woodinville working on a project to expand his shuttle services here.

If the shuttle service is successful it will take cars off the roads, easing the congestion that we have seen on peak weekends, and help tourists get the most out of their time. Mark said that he was grateful for the support of several wineries who benefit from his service in Walla Walla and have supported the expansion to Woodinville. Hermes was impressed with the entrepreneurship and suggested the next step: discount coupon books to encourage visitors to spend more time and money in the tasting rooms. 252494_172be_feb17_3740

We had time for two more tasting room visits and I selected Brian Carter Cellars and DeLille Cellars, which were conveniently located on the other side of the compact parking lot from Fidelitas and next door to each other. They represent very different ideas of Washington wine, which is what I wanted Hermes to see and taste.

Cabernet Sauvignon and Bordeaux blends like the poplar D2 and elegant Four Flags Cab are what DeLille is known for while Brian Carter likes to source a diverse range of grape varieties s to make blends that often pay tribute other regions.

Hermes was particularly taken with a Brian Carter wine called Corrida (Spanish for bullfight), a blend of Tempranillo, Graciano, and Garnacha from the Columbia Valley. The wine was balanced and had great character. A fine way to end our tour.

Wine Tourism Cluster Advantages

We were able to experience something of the variety that Washington wine offers both in terms of terroir and varietal character in just a short span of time and space. And there were about 100 other opportunities available for our next visit.

All four of the tasting rooms we visited were warm and friendly and staffed by people who knew their stuff and could answer questions confidently. We appreciate their time and generous hospitality. The individual wineries and tasting rooms are working hard to build their markets and establish a successful wine tourism industry here.

Problems remain, of course. Traffic congestion on peak weekends can remind a visitor of Napa Valley, for example, and there is room for more hospitality infrastructure, too. And it might be possible that Woodinville has exceeded critical mass and there are now too many tasting rooms competing for the same customers for all of them to be successful. I will be interested to see if a new cluster appears in Seattle’s historic Pioneer Square neighborhood where Browne Family Vineyards is opening a tasting room nearby to The Estates Wine Room.

But you could see Hermes thinking that this might be a useful model for other parts of the world — Mendoza comes to mind — where the wineries and vineyards are far from town and distance limits the growth of the wine tourism industry.

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As I noted above, our visit to Woodinville began with a tour of Chateau Ste Michelle’s new visitor center. Come back next week for details.

Video credit: Brancott Estate – ‘The Red Shed’ VR Experience from Found Studio on Vimeo.

Around the World in Eighty Wines Wins Gourmand International Wine Book Prize

January 23, 2018 By Mike Veseth in book reviews, Shameless Self-Promotion, wine, wine awards, Wine Competitions, wine tourism 9 Comments

9781442257368 My new book Around the World in Eighty Wines has received the Gourmand International 2018 award for best U.S. book in the wine and spirits tourism category and will now compete for “Best in the World” with winners from other countries. The global gold, silver, and bronze medals will be announced this May at award ceremonies in Yantai, China.

The Gourmand International awards are important and I have been fortunate to be recognized in the past for best U.S. and bronze medal “world’s best” wine history book (Wine Wars, 2012), world’s best wine blog (WineEconomist.com, 2015) and world’s best wine writing (for Money, Taste, and Wine: It’s Complicated, 2016).

Here is the list of international champions in the wine and spirits tourism category:

logo_awards Austria – Kulinarische Tourismus und Weintourismus (Springer)
Canada – Les Paradis de la Biere Blanche (Druide)
China – Compass to the ocean of wine (Zhejiang S/T) 9787534179549
France – Des Vignes et des Hommes (Feret)
Georgia – Georgia, Miquel Hudin (Vinologue)
Germany – Seewein, Wein Kultur am Bodensee (Jan Thorbeke)
Portugal – Vinhos & Petiscos (Caminho das Palavras)
Scotland – I love champagne, David Zyw (Freight Books)
Singapore – Cracking Croatian Wine, Charine Tan, Dr Matthew Horkey
Switzerland – Randos bieres en Suisse Romande, Monika Saxer (Helvetiq)
USA – Around the world in 80 wines, Mike Veseth (Rowman & Littlefield)

I am especially pleased to see that Cracking Croatian Wine by Charine Tan and Dr. Matthew Horkey is also on the list. Sue and I met Charine and Matt at the 2016 UNWTO global wine tourism conference in Tbilisi, Georgia and we like and admire them a lot. Their books are valuable additions to the resources available to wine tourists in particular and wine enthusiasts generally.

I don’t know who will be named the “best in the world,”, but I appreciate this recognition. Good luck to Charine, Matt, and all the other national champions in all the categories.

Field Notes from a Visit to Madeira: The Island Where Old Barrels Go to be Reborn

December 19, 2017 By Mike Veseth in wine, wine history, wine tourism 5 Comments

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Madeira is a Portuguese island off the coast of Morocco, a short 80 minute flight from Lisbon. When it was discovered in 1419 it was uninhabited, but now a quarter-million residents plus hundreds of thousands of tourists fill the island.

Madeira is famous for soccer (the Funchal airport is named for native son and Real Madrid striker Cristiano Ronaldo), its beaches, gardens, and mountains, too, which rise more than 1500 meters above sea level. And wine, of course.

I had been vaguely aware of Madeira (“Have some Madeira my dear”) for some time when I had the good fortune to read a terrific book called Oceans of Wine by David Hancock that opened my eyes to Madeira’s unexpected wine history (America’s founding fathers toasted the signing of the Declaration of Independence with Madeira) and unique production technique, where heat and long barrel-aging play important roles.

There followed a number of memorable Madeira experiences, which I recorded in my book Around the World in Eighty Days. Sue and I twice enjoyed a 1875 Barbieto Malvasia Madeira wine at the end of great meals at The Herbfarm restaurant in Woodinville, for example, and we shared a special bottle of Broadbent Madeira with her parents and their neighbors on another occasion.

Calling My Name

I could hear Madeira calling my name, but the opportunity to visit did not present itself until a few weeks ago, when Sue suggested that we add a long weekend in Funchal to a trip to Madrid and Porto, where I spoke to groups of local wine producers about U.S. market export opportunities.

Tourists come to Madeira for many reasons. The big draw seems to be the beach scene and the coastline near Funchal is lined with busy resort hotels. Others are attracted by walking and hiking opportunities in the beautiful mountain areas. Funchal is also a cruise ship port, so hundreds of tourists flood into town each day and disappear back on board each night at dusk. They find the attractive market, the beautiful gardens, and lots of cafes and restaurants.

Sue and I stayed at a small hotel just behind the cathedral, which put us right in the mix of tourists and local residents and just a short walk from Blandy’s, one of two Madeira lodges we visited during our stay. Blandy’s was founded in 1811 and has been throughout its history a family-owned business. A few years ago it partnered with another family firm, the Symingtons of Porto, to create the Madeira Wine Company, which makes and markets several Madeira wine brands.

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Madeira Wine History

Our tour of Blandy’s gave us a sense of the rich history of Madeira wine. The upper floors of the lodge were uncomfortably warm for us, but the barrels of wine seemed pretty happy there. The reason for the heat, if you don’t know the story, is that many years ago some Madeira producers noticed that the wines they sent abroad seemed to be transformed by the time they spent in hot ship holds.

Initially they thought that the rough movement of the ocean was the key, but they eventually learned that it was the heat that helped the wine oxidize in a particular way that made it both delicious and gave it long life. Madeira wines today spend years in old barrels (no new oak flavor is imparted) in warm rooms and the results are just as striking as they were in Jefferson’s day.

The high acidity of the base wine keeps Madeira fresh through its maturation process. Although we think of Madeira as a sweet old wine best paired with Christmas cake, Madeira ranges from dry to sweet and invites extended study — characteristics it has in common with Sherry wines.

New York Times wine critic Eric Asimov recently released his very personal list of 2017’s most memorable wines. A Blandy’s 1992 malmsey was highlighted. It was unforgettable, he said. We enjoyed the wines we tasted at Blandy’s, including the fresh and lively 1957 Bual pictured here.

Past and Present

A visit to Blandy’s is all about history, tradition, and romance and I think it should be on every tourist’s must-do list. A visit to Justino’s is a completely different experience. Justino’s once had a lodge in central Funchal like Blandy’s but they moved their operations to an industrial park outside of town a few years ago where the romance level and visitor head count are much reduced in exchanged for increased production scale and efficiency. (Blandy’s also has a modern production facility located away from town).

1999 Winemaker Dina Louis showed us around the facility and helped us taste through the wines. The barrel room was again the center of the visit, but this time it wasn’t the heat that got our attention but the age and condition of the barrels themselves. Both firms employ teams of coopers not to build barrels, as you would expect in a winery somewhere else in the world, but to keep ancient barrels in use, lending distinct character to wines. Madiera wineries scour the world looking for really old barrels in which to age their wines.

There is something about the old barrels and their individual histories and characteristics that Dina Luis finds fascinating and she spoke movingly about a particular barrel that contains her dream wine. Is barrel terroir a thing? Dina convinced us that particular barrels imparted particular subtle influences and made us really want to explore this idea more deeply.

Sue and I stumbled across a project that was underway where used Irish Whiskey barrels were imported and used to age Madeira wine for an Irish client. Then the wine is bottled the barrels will be sent back to Ireland to be filled with more Irish Whiskey — each product lending character to the one that came before. Apparently this sort of barrel fusion is part of the tradition in Madeira, where sailing ships would stop and fill their empty barrels (which previously contained other wines or spirits) with Madeira wine.

Champagne, Madeira, and a Resolution

As we toured Blandy’s and Justino’s and tasted the wines I couldn’t stop myself from finding parallels between Madeira wine and Champagne. Nobody would confuse the two wines in a tasting, but they do share several characteristics. Both begin with acidic base wines, the acidity necessarily to retain freshness through the production process. (Conventional table wines are made in Madeira and we tried as many as we could, but only found a couple that we liked — I think it must be difficult to find balance with such high acid levels).

The base wine for both Madeira and Champagne is then manipulated through an extended process — a second fermentation in the bottle for Champagne and long, hot barrel-aging for Madeira. The art of blending is important in both cases, too, with non-vintage multi-year blends most common. We like to say that wine is made in the vineyard, but these wines are both really made in the cellar.

Madeira’s ability to age makes it special, although we tasted lovely 3-year and 5-year wines, too. The oldest Madeira on my personal tasting list remains that 1875 Barbieto, but the 1934 Justino’s that Dina Luis let us sample is just as memorable.

Sue and are very lucky — our travels this year took us to Cyprus, where we tasted Commandaria — one of the oldest wines in the world — and to Madeira, where they make wines than can last for more than a century. We found unexpected wines in Spain, Portugal, and Argentina, too. But you don’t have to travel so far to discover new wines — globalization brings a world of wine to your neighborhood shops.

What’s the takeaway here? The world is full of interesting and delicious wines and maybe we ought to try a little harder to take advantage of this great diversity. Seek out new wines from new places and then circle back to under-appreciated old wines from old places. That sounds like a worthy New Year resolution!

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Many thanks to António Filipe for helping to arrange our visit to Blandy’s and to Bartholomew Broadbent for doing the same at Justino’s.

What’s Ahead for Wine Tourism in Mendoza? Lessons from a Rock Opera

November 28, 2017 By Mike Veseth in Argentina, wine, wine brands, wine tourism 1 Comment

monteviejo The United Nations World Tourism Organization’s global wine tourism conference in Mendoza, Argentina was full of contrasts as you might expect in a high desert region that is punctuated by isolated vine-filled green oases. The morning sessions featured conventional conference formats — speakers, panels, Powerpoint slides, dark rooms, coffee breaks (and really good simultaneous translation — thanks for that!). And then …

Hardly Working?

The afternoon and evening session moved out of the conference center and into the wineries, so that international participants could take in the landscape, marvel at the wonderful winery architecture, appreciate the warm hospitality, sample the many winery experiences, and of course enjoy food and wine as any wine tourist would.

Does this sound like hard work? Very few of our friends feel sorry for us when we post about these experiences on Facebook, but it really is work because Sue and I are always observing and analyzing both what the wineries do (and how they do it) and the reaction from their guests.

moonshot2 This was particularly interesting at the UNWTO conference because our fellow delegates were mainly tourism people who see opportunities in wine whereas Sue and I come at this more from the wine side, where tourism is one important element. The organized winery visits were interesting to us because they highlighted the tourism offerings rather than the wines themselves.

A reception at Bodega Séptima, for example, showed off its striking architecture and invited guests out to the big patio to stare at the moon and stars through telescopes while sipping wine. Wine tourism and astrological tourism combined.

A visit to Bodega Norton featured an opportunity to ride bicycles through the vineyards followed by a late lunch and then a chance to paint with wine (I saw a rabbit in the vineyard, so that was my artistic contribution). Norton’s program stresses active involvement, which is always more engaging than passive participation.

asado The historic buildings and ancient vines were a highlight of our asado lunch at Bodega Nieto Senetiner, where we were treated to a sensory experience organized around a Torrontes perfume and a Malbec cologne. This was interesting even though it violated the first rule of a wine tasting — don’t introduce any scents that might mask the wines’ aromas. It worked as a tourist experience, but would turn off any serious wine lover.

The Missing Link?

Sue and I enjoyed these experiences, but we noticed that something was often missing. The wineries worked very hard to show off their delightful wine tourist offerings, but they missed many opportunities to tell their stories and reinforce their brands. Perhaps this was by design because of the special character of the UNWTO audience, but it seems to me that it is always important to tell your story and build your brand.

Two of the most effective wine tourism programs we have experienced are Larkmead Vineyards in Napa Valley and Sandeman in Porto. The two wineries differ in almost every way but this: there is a clear story, which is told in several ways, and everyone you meet tells the same essential story, reinforcing the message.

A goal might be for each winery visitor to encounter the defining story three times in three different ways during a visit and to be able to share it with friends. You might call it the “Tommy” tactic (after the rock opera composed by The Who). See me, feel me, touch me, heal me. Stimulate all the visitors’ senses and touch them in a way they won’t soon forget.

The Next Step?

Perhaps this is the next step that Gabriel Fidel hinted at in his conference presentation, which encouraged the Mendoza wine tourist industry as well as the rest of us to think beyond the current focus on creating experiences. The facilities in Mendoza are world class and the experiences, including food pairing sessions, vineyard walks and rides (on both bikes and horses), and so forth are great, too.

All the pieces are here in Mendoza. Now the wineries and local wine tourism officials need to steal a tune from Tommy so that they all come together with the defining stories of the wineries and the region to create an total experience that resonates with visitors from around the world.

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Four Takeaways from the Global Wine Tourism Conference in Mendoza

November 21, 2017 By Mike Veseth in Argentina, emerging wine regions, wine, wine tourism 4 Comments

uco Sue and I are back from the second United Nations World Tourism Organization global wine tourism conference in Mendoza, Argentina. It was an intense and interesting few days in a welcoming and dynamic part of the wine world. Here are a few things we think we learned at the conference. More to follow.

You’ve Come a Long Way, Baby

Mendoza has come a long way as a wine tourist destination and they are justifiably proud of their accomplishments. Unlike Napa Valley, which is next door to cosmopolitan San Francisco and fast-paced Silicon Valley, Mendoza takes a bit of effort to visit, so its emergence as a tourist hub, is noteworthy. We were impressed with the renovated airport, which features more flights to more places more often and will surely help boost wine tourism in the future.

When Sue and I visited Mendoza a few years ago we noted that it wasn’t very easy for an independent traveler to visit many of the wineries and this problem has been addressed in several ways. Some wineries have opened tasting rooms in the city, effectively bringing the vineyard to the tourist. Among the other efforts is a special hop-on hop-off bus that visits select wineries. How convenient! We also saw many tour operators who put together custom tours of wineries as well as the many other visitors options in region.

Mendoza has a lot to be proud of when it comes to wine tourism, but the many Argentine officials and local dignitaries who spoke at the conference’s first session perhaps could have shown greater restraint. Bad news: the talking went on so long that lunch, which was scheduled for around 2 pm, was actually served closer to 6 pm. Good news: our lunch began with deep-fried empanadas served hot and fresh outdoors in the Bodega Norton vineyard. Incredible. lunch2

Don’t Look Back

Gabriel Fidel is a sort of Renaissance man. Scholar, business leader, public servant, politician — he wears many hats in Mendoza and he has been influential in the rise of the wine and wine tourist sectors. His talk charted the evolution of wine tourism in this region and included a warning not to be too proud of the past, because the future holds more challenges.

Twenty years ago, Fidel explained. The challenge was to get wineries to accept visitors at all. They just get in the way! Okay, then once wineries got the messages about the importance of visitors there was a need for facilities, then services and trained staff, and then finally some attention to creating experiences beyond the typical tasting room offer. Wine tourism does not take place in a vacuum, so wineries need to match the programs in other wine regions and take into account the level of service that tourist expect in non-wine settings, too.

Now the challenge, Fidel said, is to move ahead again rather than just taking satisfaction in past achievements. Don’t look back, Satchel Paige said, something might be gaining on you. And in this competitive environment, it is gaining fast.

Wine Tourism and Sustainable Development

My contribution to the conference was a short speech on how wine tourism can be a tool for sustainable regional development. Done right, I argued, wine tourism can benefit people, planet and profit. Done wrong … well, there can be real problems. I cited specific success stories as well as critical issues, highlighting the strategies needed to anticipate and address problems.

One journalist who attended the conference wrote to me to say that she hadn’t really thought much about the impact that tourism can have on local people and the world they live in and now she could appreciate its importance. I guess my message got through.

We visited one winery where our guide quite unintentionally revealed how wine tourism transforms local communities. His father was in the construction business and, were it not for winery development, that’s what he would be doing, too.

But now the opportunities are in wine tourism and hospitality more than traditional occupations such as construction. His family struggles a bit to understand the changing local labor scene (and the changing nature of work itself) and how exactly he can earn a living drinking wine, as they see it, and talking to strangers like us all day rather than working hard to make, build, or grow things.

Mendoza to Moldova

The transformative impact of wine tourism will be tested in Moldova, which was named as the host nation of the 2018 UNWTO global wine tourism conference. Moldova is probably the most wine-dependent country on the planet. Wine is the largest export category and the country is working very hard to open up markets in the west and in Asia and to reduce its long-standing dependence on the unreliable Russian market for wine sales.

Selling more wine at higher prices would be great for Moldova, but wine tourism is perhaps strategically more important because of its ability to increase rural incomes outside of wine production and sales. Wine tourism done right stimulates the hospitality industry with potential impacts on crafts and other local industries. Wine tourism has great potential to draw visitors to Moldova and stimulate rural development.

Hosting an international conference like this is a big, expensive job. Good luck to our Moldovan friends as they plan next year’s events.

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Sue took the photos above — the view from Bodega Moneviejo in the Uco valley and the delicious late-lunch empanadas at Bodega Norton.

Book Review: Cracking Croatian Wine

November 14, 2017 By Mike Veseth in book reviews, emerging wine regions, wine, wine tourism Leave a comment

Cracking Croatian Wine: A Visitor-Friendly Guide, by Dr. Matthew Horkey and Charine Tan, published by Exotic Wine Travel.

The Wine Economist and I (Mrs. Wine Economist) live in a community with a distinct Croatian history, with many Croatian-Americans residents, and a Slavonian American Benevolent Society that dates from 1901. A home nearby regularly flies a Croatian flag. Our city, Tacoma, Washington, and Hvar, Croatia, are sister cities. So Cracking Croatian Wine: A Visitor-Friendly Guide, by Dr. Matthew Horkey and Charine Tan, seemed like a logical extension of our local culture as well as an opportunity to learn more about Croatian wine.

Horkey and Tan, the force behind Exotic Wine Travel, explore off-the-main-tourist-path wine destinations. Cracking Croatian Wine follows on the heels of Uncorking the Caucasus, Wines of Turkey, Armenia, and Georgia. For both books, the authors spoke to (and tasted with) wine makers, sommeliers, and others with expertise and experience. The wines in both books are generally not available in our upper-left-hand corner of the United States, but some are available by mail. Even in our Croatian-heavy community, Croatian wines are rarely seen. (If anyone knows if they are available locally, let me know.)

uncork The real value is for the visitor to Croatia. Those who are visiting Croatia for beaches or historical cities and just want to enjoy a regional wine with a meal will find several options. Those who want to dive in deeply into Croatian wine will find plenty of opportunities to explore. The lists of wineries, wine bars, and wine shops offer good starting points.

Horkey and Tan write in a consumer-friendly, conversational style that is accessible to both the casual wine drinker and the aficionado. They present “wine and a story,” beginning with descriptions of the regions. Each featured wine includes helpful information about the place, the winemaker, the grape, wine-making techniques, and what they found in the glass.

I especially appreciate that they categorize wines for the connoisseur, the adventurous palate, and “fun and easy.” They also offer suggestions for those looking for budget wines.

It is clear that they immerse themselves not just in the wine culture of a place, but in the broader culture as well. Their brief discussions of Croatian history, cuisine, and geography are helpful — and necessary — for context but do not overshadow the wine-centric focus of the book.

Two aspects of the book were disappointing. The first is that the pronunciation guide does not appear until page 33; by the time you reach it, you already have encountered strings of consonants and accents. The pronunciation help along the way (the grape varieties, for example) is welcome.

Of more concern is the lack of good maps. The only map is a half- page, gray-scale map of the whole country, without showing its neighbors for context. More detailed maps of each region would be helpful to those who are not familiar with Croatia’s geography.

Belated full disclosure: my own ethnic background is half Serbian-American. I hope Horkey and Tan will produce a book on Serbian wine.

— Sue Veseth, Contributing Editor

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Reading through Croatian names reminded me of The Onion’s 1995 classic “Clinton Deploys Vowels to Bosnia; Cities of Sjlbvdnzv, Grzny to Be First Recipients,” read here by Tom and Ray Maggliozzi.