We Are All Terroirists Now

The third section of my book Wine Wars, which is celebrating its 10th birthday this  year, is called “the Revenge of the Terroirists.” As I explained in last week’s Wine Economist column, Wine Wars argues that globalization pushes the wine market forward, which is great, but one market reaction to this “creative destruction” is rationalization, which can be both good and bad.

What’s to keep wine from going off the rails and becoming just another branded consumer good? Well, it could easily happen and has happened in some cases, but I’m an optimist and, in Wine Wars, I argued that people who understand wine and appreciate what makes it different from commodity products would be a force strong enough to keep wine safe.

It’s a Wine World After All

I wasn’t the only person to see the wine market as this sort of conflict. Jonathan Nossiter’s  2004 film Mondovino took a decidedly less optimistic view of this battlefield. The forces of globalization and commodification (symbolized by the Mondavi family brand in this poster for the film), are determined and powerful. Can the first terroirist we meet in the film, Giovanni Battista Columbu, guardian of Malvasia di Bosa in Sardinia (shown here below the Mondavis) possibly stand in the way of the global market juggernaut?

If that’s the war — big vs little, money vs traditional values — then it would seem like the wine wars have already been lost. But that’s not necessarily how things have to work out.

Large wine businesses are not all the same. For one thing, only a surprisingly small proportion of wine business are public corporations with professional managements than have to answer to investors with constantly rising quarterly profits and share prices. As I have pointed out before, a great many wine businesses, even the largest of them (think Gallo!) are family firms that think in generational terms. This long term thinking doesn’t guarantee a terroirist attitude, but it at least sometimes points in that direction.

B Corps, Slow Wine

Indeed, a number of important wine businesses are benefit corporations (B-Corps for short). Oregon’s A to Z Wineworks was the first in this growing group and  Portugal’s Symington Family Estates one of the most internationally recognized. Fetzer, the California winery long known for its environmental focus, was the world’s  largest B Corp wine company … until last Friday! That’s when its parent company, Viña Concha y Toro, announced that all of its global operations had received B Corp certification. Amazing!

B Corps make no specific commitment to terroir, of course, which is natural since they can be found in all sorts of industries (the little coffee shop on the corner hereabouts is part of a B Corp operation). But the values that B Corps commit themselves to supporting are different from those of the stereotypical corporate behemoth.

I’m also encouraged by my study of the Slow Food movement. Founded in Italy but now spanning the globe, Slow Food is a grassroots counterpoint to industrial food and agriculture. It doesn’t confront global corporations directly by, for example, bombing McDonalds restaurants the way French anti-globalization protestors used to do. Slow Food instead works to identify products and practices of tradition and terroir and then seeks to promote and preserve them using the very tools of media and markets that we usually associate with industry. Slow Food uses the weapons of global capitalism against itself, an elegant irony, don’t you think?

Slow Wine is a thing, too,  and the guide to Slow Wine USA 2021 has just been released. You should check it out.

We Are All Terroirists Now

To paraphrase a comment attributed to both Milton Friedman and Richard Nixon (see note below), we are all terroirists now. Well, almost all or at least a lot more of us. The reason: climate change. Climate change is real and it is a crisis, even if we don’t treat it like a crisis (compare the reaction to the Covid global pandemic to climate change and you can see that climate isn’t given the same priority). Last year’s wildfires and this spring’s killer European frosts are reminders of the climate’s destructive volatility.

The wine business needs to take account of changing environmental conditions and, while this isn’t the same vision of terroirism that you see in Mondovino, it is a step in that direction.  More steps are needed, both to address the environmental risks and to secure the future of wine.

I’m trying to figure out where the natural wine movement fits into the revenge of the terroirists. Natural wine producers often fit the terroirist stereotype that Jonathan Nossiter established in Mondovino. In fact, Nossiter has written a book about them called Cultural Insurrection: A Manifesto for Arts, Agriculture, and Natural Wine.. Natural wine advocates in Nossiter’s telling of the story tend to define wine more narrowly than I do (something that I pointed out in reaction to Nossiter’s book), but they still contribute to the “revenge” I hope to see.

Not Exactly a Manifesto

Nossiter’s vision of wine sees a world of industrial wine versus natural wine and industrial wine needs to disappear because, well, it isn’t really wine at all. It’s just a toxic chemical concoction. A lot of people see wine in terms of a dichotomy — wine of the market versus wine of place, commercial wine versus fine wine, you get the idea. Generally they make this distinction in order to favor one type of wine — almost always the terroirist side of the equation.

My realist perspective is that there many types of wine, including high volume commercial  wines. They are all wine and each category fills a consumer niche. What is important to me is that the big doesn’t crowd out the small, that terroir wines and the terroir that produces them endures. And that consumers  understand the choices they make and their implications.

It’s a complicated situation, a fact easily illustrated by the case of Canadian billionaire Anthony von Mandl. Terroirist or not? You be the judge!

On one hand, von Mandl is the head of the company that makes Mike’s Hard Lemonade and White Claw hard seltzer. These terroir-free alco-pop beverages are insanely popular and my market research friends tell me that they are partly responsible for declining sales of inexpensive (and, it must be said, also relatively terroir-free) commodity wine.

On the other hand, however, von Mandl is the Robert Mondavi of the Okanagan Valley in Canada. He’s the founder of iconic Mission Hill Winery and, according to a recently VinePair report, is a driving force in British Columbia’s organic wine movement. Six wineries in von Mandl’s Mark Anthony Group are leading the charge, converting about 1300 acres to organic viticulture:  Mission Hill Family EstateCedarCreek Estate WineryRoad 13 VineyardsLiquidity WinesMartin’s Lane and Checkmate Artisanal Winery.

Do you appreciate irony here? White Claw money funding a terroirist revenge in the beautiful Okanagan Valley.

Whether  you think of terroirism as a broad phenomenon or a narrow reaction movement, I hope you can see its importance in the wine wars of today and the battles of tomorrow. Are we all really terroirists now? No, not really. But the I think the wine world has come a long way from the David versus Goliath world of Mondovino.

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“We are all Keynesians now” is the comment commonly attributed to Friedman and Nixon and if they were still alive they would probably repeat the saying again. I cannot think of any time in the past 40 years when fiscal policy has been more important.

The New Wine Wars

We are celebrating  the tenth anniversary of the publication on my book Wine Wars here at Wine Economist world headquarters and I want to use this opportunity to reflect on how the wine world has changed since 2011. As I explained in last week’s column, Wine Wars is organized around a trio of strong forces that together (along with other factors, of course) shape the wine sector and many other industries, t00.  In very simple terms …

Globalization drives change. Commodification is a commercial response to these disruptive forces. Together globalization and commodification provoke grass-roots reactions that I call “the revenge of the terroirists.”  I think the framework still applies. But things have indeed changed. Here are some notes.

Wine and Globalization

Globalization continues to be a driving force in the world wine sector. Indeed, I think it is safe to say that more different wines from more different places are now available to more different consumers than at any point in history. World wine is truly an embarrassment of riches! Wherever we have travelled in the world of wine we’ve met producers anxiously seeking new opportunities.

But while the globalization pulse remains strong, there have been important qualitative and quantitative shifts. The first is that the fundamental nature of the market has changed from positive-sum to something much closer to zero-sum. As I was writing Wine Wars the world wine market had just come to the end of an era of expanding global wine consumption. I am not sure any of us where really aware of this sea change at the time. It was easy to blame the down-tick in consumption on the global financial crisis. But the recovery up-tick didn’t follow.

As this OIV graph shows, in place of rising year-on-year global wine consumption, we  entered what I have called global wine’s lost decade. (The most recent OIV data, which will be released later today, show dramatic further consumption decline in 2019 and 2020.) Global wine consumption reached a high plateau and flat-lined. Demand bumped up and down a bit from year to year, but that rising trend line that was so powerful before had vanished.

This doesn’t mean that wine demand was flat everywhere, of course. Among the major markets, structural demand declines in the old world — Spain, France, and Italy — was offset by rising demand in some new world markets, especially China (from a low base) and the United States (slow growth, but still growth).  I profiled what were then the three most important wine markets in Wine Wars: the UK, Germany, and the United States. Today you would need to add China to that list. In Wine Wars I speculated about what the rise of China might mean and some readers wondered why I even asked the question. There are still plenty of questions about China and wine, especially since recently sharp declines in both production and consumption in China ,but no one seriously doubts its importance any more.

Caught in the Crossfire

Global wine has changed in another important respect. Globalization in pre-Wine Wars was all about expanding international trade. Free trade agreements were the order of the day and the more of them that a country could negotiate the better. Chile was a big winner in this competition and its wine industry benefited enormously from easy access to the most important markets.

Now wine is caught in the crossfire of tariffs and trade barriers. The U.S. has imposed tariffs on some European wines, for example, and China has raised  trade restrictions on wine from both the U.S. and Australia. U.S. wine sales in China were relatively small, so the economic loss was limited, but China was Australia’s #1 export market and the pain is hard to over-state. In the meantime, the British withdrawal from the European Union — a.k.a. “Brexit is Brexit” — has thrown sand in the wheels of what was once a very efficient set of trading arrangements.

What is interesting about the new political economy of wine tariffs and trade is that it isn’t really about wine at all. Wine is simply caught in the cross-fire in other disputes. Why pick on poor innocent wine? Probably because wine has a clear identity and national association. Sanctions on wine from a particular place send a clear message. And of course with so many wines available from other places, the harm to consumers who are willing to accept substitute products is pretty limited.

Globalization is built on many complex structures including especially global communications networks, so it is easy to forget about supply chains and logistics until they break down — and that’s the most recent challenge that wine and other global goods confront. Global supply chains have recently shown themselves to be less reliable and most costly than many supposed when plans were made just a few years ago. The benefits of global reach must always be weighed against the security of local linkages. How much this trade-off has changed and to what extent it will impact the global wine sector is still to be determined.

Wine and Commodification

Commodity wine is only one side of the industry, but it has been an area of growth in the decade since Wine Wars first appeared. One way to appreciate this is to look at wine branding trends. There are many different types of brands, of course. Champagne is a brand, for example, and the producers are diligent in protecting their brand’s intellectual property. More broadly, there are collective brands (appellations, AVAs, etc.) and private brands (Mouton Cadet, Barefoot, etc.). Brands are successful when they encourage demand by providing an indicator of consistent value and quality.

As the market has become more congested, brands have become more important and evolved in interesting ways. One of the most important trends, which Wine Wars anticipated, is the rise of private label wines (which some call “exclusive label” wines in a nice bit of marketing). The maker’s brand is generally replaced or supplanted by the seller’s brand.  British supermarkets like Tesco made private label wine an important category and now it is everywhere. Here in the U.S. Costco, Walmart, and Target have their own wine brands, for example. But the phenomenon isn’t limited to large-multiple sellers. The upscale supermarket down the street (which appeared prominently in Chapter 3 of Wine Wars) is part of a small local  chain (nothing like Kroger’s vast network), but it has its own private label Champagne.

As the wine market has stagnated over all in many regions, the demand for private label wine has grown. Buyers look for value, retailers see higher margins. Growers and producers get the business they need even if they don’t control branding.  Some of these wines are very high quality. Others, of course, are drawn from lots of generic bulk wine from sources that vary from year to year and lot to lot depending upon price among other factors.

Take It To the Limit

What happens if the trend towards generic wines is taken to its logical extreme? In Wine Wars I joked (sort of) that we’d be left with Bud Red and Bud White — a threat that is more potent today with wine-in-cans gaining popularity. But I could never have imagined that we’d be staring at the specter of hard seltzer!

Wine today competes for a share of the stagnant overall beverage alcohol market. That means the growth in total wine sales need to come from other alcohol categories. And the toughest competitor in this space — the one that has been eating market share for lunch — is hard seltzer, a.k.a. flavored alcoholic fizzy water. I may be wrong, but this seems to me to be the real least common denominator threat to the idea of wine that most readers of this page likely share. Yes, I know that we’ve always had products like wine coolers, which may have served as a first step on the wine ladder. But if hard seltzer is the first step, I’m not sure what the second step might be!

Ultimately Wine Wars counted on what I called “the revenge of the terroirists” to keep wine from jumping the branded goods shark. How has that worked out? Come back next week for my thoughts.

Wine Wars: Curses, Miracles, and Revenge

Wine Wars 2011: the first books arrive.

As I explained in last week’s Wine Economist column, this is the tenth anniversary of the publication of my first book on the wine business, Wine Wars. Although the catchy title (suggested by the smart marketing people at Rowman & Littlefield) gets your attention, it is the long subtitle that outlines the book’s argument. This is a story of “the Curse of the Blue Nun, the Miracle of Two Buck Chuck, and the Revenge of the Terroirists.”

Here is a quick sketch of the book’s argument. I’ll return next week with thoughts about how things have changed (and how the argument has held  up) in the decade since publication.

Curse of the Blue Nun

Blue Nun was arguably the world’s first global wine brand, so it represents the argument that globalization has been a powerful force in the wine world. What’s the curse? Well Blue Nun began as a very high quality German wine but, as it and other wines like it became more successful, eventually quality suffered. Blue Nun continued to sell, but it wasn’t the same. The curse of globalization is therefore that success on the global market can be double-edged, both creating and destroying.

Globalization has brought a world of wines to our door, which is also good and bad. This is the paradox of choice. No choice is bad. It is like the old Soviet joke where everything is either mandatory or forbidden. But too much choice is bad, too, and can be a particular problem for wine. It is not unusual for upscale supermarkets to have more than 1000 different wines on the shelf at prices ranging from a few dollars to hundreds of dollars. Wow! Not always easy to make sense of such an over-whelming selection.

Miracle of Two Buck Chuck

One way that many consumers react to this, the most confusing aisle in the store, is to confuse price with quality. Cheap wines must be bad. Expensive ones must be good. Clever marketers take advantage of this misconception in all sorts of ways that I discussed in the book. Hence the miracle of Two Buck Chuck. For many years Trader Joe’s stories in the U.S. sold a wine called Charles Shaw for $1.99 (do you see the two buck Chuck in that)? And millions of people who might otherwise have drifted away from the wine wall bought it and enjoyed it. TBC is an important element of the democratization of wine in America.

People think the miracle of Two Buck Chuck is its price, but let me assure you that you can make and sell a wine for $2 if you want to. In Europe I saw a wine that was one euro for a liter in tetra-pack carton. That’s equivalent to one buck Chuck! No the miracle is that consumers would buy it despite its bottom shelf price. They bought TBC because they trusted Trader Joe’s to sell good value products and then, having tried it, they trusted  Two Buck Chuck to deliver consistently. Trader Joe’s and the Bronco Wine Company that makes TBC created a powerful brand that has sold millions and millions of bottles.

Commercial brands are one way to help consumers break out of the paradox of choice by economizing on trust. You don’t have to trust the grape variety or the appellation or the vintage year. You only have to trust the brand. That simplifies things for sure. But there’s a risk. Albert Einstein said that everything should be as simple as possible, but no simpler. And that’s true of wine, too. If branding and commoditization simply wine too much and undermine its quality, then the miracle can quickly become a curse!

Revenge of the Terroirists

What is there to keep wine from becoming just another branded commodity? I am an optimist, so I proposed a counter-force that I called the revenge of the terroirists. This term, taken from the French terroir, has caused a little confusion over the years. I am sure that Wine Economist readers know what I mean, but auto-spell programs always try to correct it and there was even one case where a gentleman came to one of my talks thinking that I was speaking about terrorists and wine. Terroir. Terror. Hmmmm. Easy to see how that could happen.

In fact, some terroirists back then were terrorists, or at least they used terrorist tactics to oppose the incursion of industrial wine into the south of France. But I wasn’t counting on violence to hold back the commodification tide. No, I put my money on the dedicated few who opposed industrial wines the same way that the Slow Food movement (which I wrote about in my Globaloney books) opposes industrial food — by fostering an alternative rooted in and celebrating tradition but using the best appropriate modern practices.

Would the terroirist resistance endure? It wasn’t a sure thing then (or now either, I suppose) but I was cautiously optimistic. As the last line of the book says, I still have grape expectations.

A Trip to Napa Valley

Each of Wine Wars’s three sections ends with an invitation to taste some wines that illustrate the relevant part of the argument. The final tasting re-creates a trip that Sue and I took just as work on the book was coming to an end. We were in California for a meeting of academic wine economists at the University of California at Davis. We skipped the sessions one afternoon and drove to Napa Valley. We made three stops: a small family winery, a larger and more famous firm — Frog’s Leap — whose winemaker John Williams is world-famous for his terroirist work. We ended the day at the Robert Mondavi Winery where our academic colleagues had gathered for the conference closing banquet.

Frog’s Leap is still going strong, principles in-tact, with the next generation hard at work. That small family winery no longer exists. The wine business is hard and every year new wineries spring up while old wineries quietly fade away. Robert Mondavi is still there, of course, but it is no longer owned by the Mondavi family. They incorporated their winery in order to get resources for new projects and then lost control of it. Constellation Brands is the owner now.

The China Syndrome

The penultimate chapter of Wine Wars is called The China Syndrome and it provides an interesting perspective on how much things have changed in just ten years.  China was best known in the wine world back then as place to sell Bordeaux wines, both the iconic first growths but also lesser wines, even from questionable vintages. The Chinese couldn’t get enough Bordeaux.

Submerged under that sea of Bordeaux, however, was a growing Chinese wine industry — that’s what caught my eye. I reported on my first taste of a Chinese wine and it wasn’t very pleasant. Ashtray, coffee grounds, a whiff of urinal crust. Ugh! Bad Chinese wine was very bad indeed, as bad wine is everywhere.

But I also reported on a much different experience — a bottle of Grace Vineyards Cabernet Franc that we shared at an Open That Bottle Night dinner. Very nice indeed and it made me wonder where Chinese wine was headed (a question that continues to interest me — I’ve written  about China in each of the subsequent wine books). Not good vs bad — I was pretty sure that better wine would rise to the top. No I wondered if Chinese wine would try to copy-cat the French as wine has done in so many other places. Or would the wine industry there develop in a way that reflects its particular terroir — wine with particular Chinese characteristics?

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I do think that the overall argument of Wine Wars has help up pretty well, which is a bit of a surprise given how much has changed. What would I change if I were writing it again now? Come back next week to find out.

Ten Years of Wine Wars

2021 marks the tenth anniversary of the publication of my first book about the business of wine, Wine Wars: the Curse of the Blue Nun, the Miracle of Two Buck Chuck, and the Revenge of the Terroirists.

Wine Wars was written to encourage readers to consider how market forces help shape what’s in our collective wine glass. The  book received very positive reviews upon publication and it remains popular (and, people tell me, still relevant) today. Indeed, it still occasionally shows up on Amazon.com’s Top 100 Wine Book Best-Seller list. Amazing.

The Tables Turned

The story of Wine Wars begins many years ago when Sue and I were taking a short vacation break in Napa Valley, which I describe in the book’s first chapter.  Our final tasting room stop on the final day of the trip made a lasting impression.  The weary winemaker poured the usual tasting flight and I tried to ask intelligent questions. Then I let slip that I was an economics professor and suddenly the tables turned. The winemaker had many questions, very serious questions, and he wanted answers from me.

The investments he was making in vineyards and cellar would not begin to pay off for years. What was going to happen to the interest rates on his loans and to the economy and wine market? Wine economics to him wasn’t an abstract academic exercise. Economic factors conditioned the kind of wine he could make if the monetary stars aligned or what he would be forced to do if they did not. It was an unexpectedly intense experience that made me appreciate that economic analysis could make a useful contribution to the wine industry.

Globalization vs. Terroir

My first stab at writing about wine economics was a chapter called “Globalization vs Terroir” in my 2005 book Globaloney: Unravelling the Myths of Globalization (still available in the  updated 2010 edition called Globaloney 2.0: The Crash of 2008 and the Future of Globalization).

I wrote Globaloney in reaction to the popular idea that globalization is a homogenizing one-size-fits-all phenomenon — think Coca-Cola-ization or McDonalds-ization. The book is a collection of case studies of how globalization has unfolded in different ways in different countries and industries.

By comparing globalization of basketball and soccer, fast food and slow food, second-hand clothes and fine wine, I tried to make the case that globalization reflects its terroir and that people sometimes have more ability than many acknowledge to shape it.

Globaloney gave me the opportunity to study the global wine industry and to travel to New Zealand to learn more about that country’s unlikely rise as a global wine powerhouse. Kiwi wine really is the “mouse that roared,” if you know what I mean.

Open Source Research

I wanted to learn more and my next step, which wouldn’t have been possible just a few years before, was to start this blog, The Wine Economist. I sensed that the best way to sharpen my thinking wouldn’t be to just attend academic conference and write journal articles. Using the web, I could try out ideas in a public space and get feedback from smart people around the world and in every corner of the global wine industry.

At about the same time I gratefully seized the opportunity to teach a university class on “The Idea of Wine” that traced wine from dirt to vine to cellar to market and all around the world. Nothing forces you to get your thoughts in order like the necessity of explaining them to others (in this case a diverse collection of very smart university seniors).

The result of this clear thinking attempt was Wine Wars. I enjoyed writing this book, but I wasn’t really sure if anyone would want to read it. So I was surprised and delighted when it found an enthusiastic audience. Wine business people tell me that it helps them connect the dots of what they do with the rest of the product chain.  Wine students find that it fills in the business-side gaps in their preparation in an interesting way (a surprising number of Masters of Wine have cited it as a resource).

Wine consumers seem to like it too, since it adds a new dimension to their favorite beverage. Wine is good, but wine and a story — even an economic story — is better yet. It has been used as a text in a wide range of university classes including international business, international relations, and globalization studies.

Wine Wars has been followed by three more wine books. Since Wine Wars focused on the mainstream wine markets, for example, Extreme Wine (2013) explored the edges, where change often happens first.

Ten Years After

Money, Taste, and Wine (2015) asked the question “how does wine change when there is money involved?” and answered it in as many ways as I could find. Finally, Around the World in Eighty Wines (2017, paperback 2020) tries to understand the source of wine’s fascination by taking a Jules Verne-inspired wine-fueled adventure that mirrors our own “Wine Economist World Tour” wild ride traveling the world to speak at wine industry events.

Both Wine Wars and Around the World in Eighty Wines have been published in translation (Romanian and Russian respectively with a Portuguese edition of Eighty Wines pending). The blog and books have received many awards including best wine blog, best wine book, and best wine writing.  Incredible that all this should evolve from that Napa tasting long ago.

A lot has changed in the economy and the wine world in these ten years. How has the argument I made in Wine Wars held up?  Come back next week to find out.

Războaiele Vinului: Romanian Wine Wars

newwinewars

Romania has a long wine history and a more significant contemporary wine market presence than many observers appreciate. Its fine wines seem to fly under the radar here in the United States.

Romania produces more wine than New Zealand, according to OIV statistics. So why are Kiwi wines much  better known on the international scene?

Strategy is one answer. New Zealand is highly export-driven, powered by international and multinational investment, while Romanians drink much more of their own wine and export less. In fact, statistics I found suggest that Romanian spending on imports generally exceeds their wine export receipts, creating a negative wine trade balance.

Market positioning is another difference. When New Zealand was breaking into the high-margin US and UK markets 20 years ago many Romanian producers were focused on the lower-margin Russian and CIS markets. This is changing. Exports to the UK, China, and Germany among others now lead the charge. Romanian wine is on the rise.

I was pleased, therefore, to learn that a Romanian translation of my 2011 book Wine Wars has been released. It is called Războaiele Vinului, which translates as “War of Wine.”  The subtitle, “The Curse of the Blue Nun, the Miracle of Two Buck Chuck and the Revenge of the Terroirists” is “Blestemul Blue Nun, Miracolul Two Buck Chuck și Razboaiele Teroriștilor” in Romanian.

The Romanian Wine Wars was adapted by Catalin Paduraru and translated by Radu Rizea. Why translate Wine Wars into Romanian? Catalin believes that it is important for Romanian wine producers to better understand the global markets in which they and their wines compete. He sees Wine Wars as an approachable and understandable analysis of global wine dynamics and was willing to go to a good deal of trouble to make it available in Romania. I’m flattered by this attention and hope that Romanian wine-makers can leverage this analysis to help them gain ground in the fiercely competitive global markets.

I hope to find an opportunity to visit Romania later this year and talk about their wine wars with my Romanian readers. Cheers to you all, and especially to Catalin for all the work he put into this project.

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Update. The Romanian edition of Wine Wars has been named the book of the year by an important Romanian publication.

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Bach, Beethoven, Bordeaux? Classical Music & the Terroirists’ Revenge

The Future Symphony Institute has published an essay that I wrote for them titled “The Revenge of the Terroirists.” It talks about the complicated relationship between fine wine and classical music in the modern world. Because it is very brief the arguments are not fully developed, but I think you will see where I am going with it.

I invite you to click on the links above to read the essay and to learn about the Future Symphony Institute and its ambitious mission.

What Can Wine Teach Classical Music?

The idea for this essay springs from a series of conversations I have been having with Andrew Balio, the principal trumpet of the Baltimore Symphony Orchestra and the executive director of the Institute. Balio’s mission is to try to help the musical world think through the economic and intellectual crises that confront classical music and to begin the process of rethinking and renewing it for the 21st century.

The website puts it this way: “Our mission is to formulate a strategy for the renaissance of live classical music and to translate that strategy into programs made freely available to everyone they may benefit.”

Balio was interested in wine because it seemed to him that the wine world had resisted some of the forces that are plaguing classical music. Not all wine is great, but there is substantial and expanding support of and interest in the practices, values and traditions associated with authentic wine and wine culture.

And the interest in fine wine is not limited to the rich or the elderly. It is a very broad movement and an expanding one. If wine can do this, he wondered, maybe classical music can do it, too.

The Terroirist Cause

I am interested in this project for three reasons. First, I see Balio and his colleagues as “terroirists” who push back against commodification and unnecessary simplification.  I wrote about and championed the terroirist cause in my 2011 book Wine Wars. Second, I am a fan of classical music, especially chamber music, and I hope they will achieve their ambitious goals.

Finally, as a member of the board of trustees of a liberal arts college, I recognize that many of the issues that confront classical music organizations are similar to the challenges facing the liberal arts.

Once upon a time there was broader understanding and appreciation of the value and purpose of both classical music and liberal arts education. But for somewhat similar reasons both have become very expensive to produce and their critical role in civilization seems to have been forgotten by many.

Both sets of institutions need to rethink their business models to address the new reality, but that will not be enough. Both need to engage society in new ways that will renew understanding and appreciation without diluting or distorting the values that made them important in the first place. Both need a strong dose of terroirism combined with thoughtful and effective strategy.

The Future Symphony Institute seems like one place where this might happen. I hope my brief essay will help the Future Symphony Institute as it launches a series of articles examining ways that wine can inform classical music and help move it back to center stage.

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The illustration above is from a poster created by the Walla Walla Symphony Orchestra that uses the language of wine to talk about their music. That’s a great idea that works both ways. Haven’t you heard a wine described as “harmonious?”

Can Portugal Win the Wine Wars?

My recent trip to Portugal was eye-opening and will be the subject of Wine Economist columns for the next few weeks. I was invited to speak at a wine industry gathering held in association with a Portuguese wine festival called Essência Do Vinho at the historic Palacio dal Bolsa in Porto.  I will paste the program at the end of this post.

The conference was organized by ACIBEV (Associação dos Comerciantes e Industriais de Bebidas Espirituosas e Vinhos or Portugal’s Association of Traders and Producers of Spirits and Wine) which is an organization intended to help Portuguese producers work together on a wide range of issues of common interest.

Can Portugal Wine the Wine Wars?

The program was called “Pode Portugal Ganhar a Guerra do Vinho?”  or “Can Portugal Win the Wine Wars.”  My job was both easy and hard, Easy because I’ve spoken many times about Wine Wars, my 2011 book on the economic forces shaping the global wine industry.  But also difficult because I didn’t know very much about the Portuguese wine business when I agreed to give the talk and so I had to kick into student exam-cram mode.

I worked very hard to learn all I could before getting on the plane, but I knew that most of my education would be on-the-spot, talking with the people there.  I also needed to consider the rest of the program, particularly the speaker who would go before me,  Susana García Dolla, Vice Secretary General of Spanish Wine Federation (FEV) and a representative of the pan-European group Wine in Moderation. (Susana gave a fantastic talk!)acibev2

So I framed my remarks carefully and tried to leverage my fresh perspective on the wines of Portugal into something of value to the audience. There were a lot of messages, as Paul Symington noted in his commentary following my remarks, and I don’t think I pushed some them far enough in some cases (as he pointedly did because of his mastery of the issues in Portugal).  I thought you might be interested in one piece of the lecture that several people said they especially appreciated.

Wine Wars: Know Which War? Which Opponent?

The wine wars that I talk about in Wine Wars are the three economic forces that I see as shaping global wine: the push forces of globalization (the Curse of the Blue Nun) and the growing power of brands (the Miracle of Two Buck Chuck) and the push-back forces that seek to preserve and protect wine’s special place in life (the Revenge of the Terroirists).

Portugal is part of that war, I told my audience. The Portuguese practically invented globalization and are famous for global wine brands (Port is a powerhouse brand, for example, and Portuguese mass market branded wines such as Lancers and Mateus are famous). I could tell the whole Wine Wars story as a Portuguese story with very little effort. But that’s not the only wine war.

I quickly sketched several other wine wars that are important to understand. If you talk about a wine war to wine producers, they naturally think of the war in terms of the battle for sales and shelf space — the war that pits one winery against another. This seems like the critical battlefield, I think, because it is the most immediate one. But you can win in that arena and still lose the bigger contest if you ignore the other wars.

The Drinks War

Wine is also fighting what you might call the beverage war or the drinks war. In part because of globalization and the rise of branded wines and in part because of other factors (changing demographics prime among them), wine is increasingly seen as part of the “drinks” category of consumer goods that includes beer, cider and spirits.  You can see this as part of the democratization of wine (which is good) or a symptom that wine is losing its special place in the marketplace (not so good).

The fact of the drinks war changes things because now the real opponents are not other wine producers, they are the makers of other alcoholic and even some non-alcoholic beverages.  Your old enemy is now your best potential ally and the strategies that might have worked in wine vs wine battles are of little use. Wine vs beer, wine vs cider, wine vs spirits — those are the fights that matter now.

The new emphasis on innovation in wine (the topic of next week’s column) is driven in part by the drinks war and the need to confront innovative new challengers with new strategies.

The War Against Wine

The war against wine is part of the rising anti-alcohol movement in Europe and elsewhere around the world. We think of wine as the drink of moderation, but alcohol is alcohol to these activists, and so they seek to tax it, regulate it, restrict it, and generally discourage its sale, marketing and consumption.

We are familiar with the war against wine in the US because we lost it so tragically in the last century. The great experiment of Prohibition pretty much destroyed the US wine industry, which has still not fully recovered.

The war against wine is perhaps the most serious battle of them all, which is why Susana’s presentation was so important. She outlined the strategies and tactics that Wine in Moderation is employing in its efforts to present the positive case for wine and to counter anti-alcohol propaganda.

Can Portugal win the wine wars? Portuguese wines are attracting a lot of positive attention these days and I think it is about time that they were recognized. But it is a tough marketplace, with competition from every corner of the wine world. Portuguese producers need to work together (which is why ACIBEV’s efforts and the Wines in Moderation project are so important) in order to complete as individual wineries more effectively.

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Special thanks to George Sandeman, Eduardo Medeiros and Ana Isabel Alves of ACIBEV for their kindness and hospitality and to my discussants Paul Symington and Francisco Sousa Ferreira for their pertinent analysis.

Here is the program for the Porto event.

Can Portugal Win the Wine Wars?

10.00: Opening by Eduardo Medeiros, Administrator and Director of Bacalhôa ACIBEV Group


10h10: Presentation of Manuel Novaes Cabral, President of the Port Wine Institute


10.20: “Spain – A Promotion of Moderate Consumption” – Susana García Dolla, Vice Secretary General of Spanish Wine Federation (FEV)


11h30: “Shifting Center, Rising Tide: Portugal in the Changing Global Wine Market” SPEAKER: Mike Veseth – Editor of The Wine Economist and Professor Emeritus, University of Puget Sound

Commentators: Paul Symington – Symington Family Estates Francisco Sousa Ferreira – Wine Ventures MODERATOR: Eduardo Medeiros – Bacalhôa Group, Director of ACIBEV


12:45: Speech by George Sandeman, Director of Sogrape and President of ACIBEV

Who Should Be The Voice of Wine Wars?

I’ve just learned that Audible.com is going to produce an audio book version of Wine Wars. They are interested in my opinion about who should read the book — what kind of voice would be best for Wine Wars?

I’m not sure, so I thought I would ask you, my readers. Should the voice be young or old? Male or female?  Should the reader have an accent of some sort — British, French, Spanish, Italian?  Is there a particular person’s voice that you’d like to hear?

Please use the comments section below to let me know what you think.  I don’t know if Audible.com will take your advice,  but if they respond to a particular comment I will send that person an autographed book (your choice of Wine Wars, Extreme Wine when it is published or Globaloney 2.0).

Between Two Worlds: The Paradox of the Columbia Gorge AVA

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Columbia Gorge: Washington on the left, Oregon on the right.

Washington State produces much more wine than Oregon, but Oregon wines are sometimes easier to find outside the Pacific Northwest. That was a paradox that I discovered as I traveled around the country last year on the Wine Wars book tour and giving alumni talks for the University of Puget Sound.

The Signature Wine Advantage

One explanation for this surprising situation is that Oregon has a “signature wine” while Washington does not. When people think of Oregon they think Pinot Noir and so retailers know what to stock — Pinot Noir at various price points. But what comes to mind when you think of Washington? Nothing, the argument goes, because Washington is many things — Cabernet, Merlot, Riesling, Chardonnay, Syrah, various blends, etc. etc. — and not any one particular thing. Lacking a signature wine variety, retailers don’t know what to stock on their shelves, so they stock less, concerned that it might not sell.

This argument is over-simplified for sure and probably over-sold, too, but the signature variety issue does seems to give Oregon a bit of an advantage over Washington and has caused much  hand-wringing on the north side of the Columbia River over the years.

Lucky Oregon — they’re Pinot Noir. Everyone knows who they are. Poor Washington — we’re [almost] everything, but how do we communicate that? I want to look at both sides of this dilemma over the next few weeks and see if I can shed any light on the question of how wine regions define themselves and the challenges and opportunities of the different strategies.

The Other Oregons

So let’s talk about Oregon. It is rightly known for its fine Pinot Noir wines and it highlights this fact each year at the International Pinot Noir Celebration in McMinnville.  The IPNC gathers Pinot-makers and Pinot-lovers from all around the world, drawing attention to the Oregon industry. It’s an intense experience — so intense that I use it as the focal point for the chapter on “Extreme Wine People” in my forthcoming book Extreme Wine.

But Oregon is not really a one note samba — it is more than Pinot Noir and more than the Willamette Valley, too. And that’s a bit of a problem, because while signature varieties like Oregon Pinot open doors to a wider market, they can also erect barriers to public recognition of other wines and regions. The wine world is very complicated and I wonder if consumers and retailers who think they finally understand Oregon (or Washington or Chile, etc. etc.) are interested in having that understanding challenged, even if the result would benefit them?

I’m exploring how this question plays out in the “other Oregons” in two stages. We’ve just returned from a weekend of research in the Columbia Gorge AVA, to see one example of Oregon beyond Pinot Noir, and we plan to visit Southern Oregon later in the year for a different take on the situation.

Absolutely Gorgeous

The Columbia Gorge AVA, established in 2004, is a beautiful region with many excellent wines, but it is sort of trapped between two worlds. It starts near the town of Hood River, about an hour east of Portland on Interstate 84, and extends past The Dalles. The AVA runs along both sides of the Columbia River, embracing vineyards and wineries on both the Washington and Oregon shores. Is it a Washington AVA or an Oregon AVA? Both, I think, but that’s part of the “two worlds” confusion.

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A typically complicated Columbia Gorge terroir.

The western end of the AVA is very much classic Oregon on both sides of the river. Like the Willamette Valley, the climate is rainy (36 inches a year on average, but as much as 50 inches at the famous Celilo Vineyard) and cooler climate grapes like Pinot Noir, Chardonnay, Riesling and Gewurztraminer do well here.  The Chardonnays and Pinots we tasted at Phelps Creek Vineyards were distinctly and intentionally Burgundian in style, for example, and Rich Cushman’s Rieslings at Viento Wines are works of the Riesling-maker’s art. Nice wines!

Oregon to the West, Washington to the East

So the Gorge is Oregon on the west end (and on both sides of the river), but as you drive east things begin to change. By the time you reach The Dalles you’ve experienced a rain shadow effect and the average rainfall is just 10 inches! Cabernet and Merlot (Washington wine grape varieties) do really well here as do Syrah and even Zinfandel. (Watch for a future post about the 120 year-old Zinfandel vines we found!).

Washington or Oregon? It’s not so much which side of the river as which end of the AVA. But it gets even more confusing (for anyone seeking a simple identity for the wine region), because elevation and aspect are key factors, too. Winegrower Lonnie Wright (the curator of those old Zin vines), drove us to a hilltop where rows of Zinfandel vines cascaded down the south-facing slope while Pinot Noir vines streamed down the north-facing side, the Zin benefiting from the advantageous aspect while the Pinot prospered because of the elevation.

It’s Complicated

The Gorge is divided in other ways, too. While you and I might think of it in terms of wine, other crops are probably bigger business for the local landowners. You can’t imagine the acres of apples, pears and cherries we drove through on our way to the hillside vineyards. And tourism just might be a  bigger industry in the long run. Fortunately these three sides of the Gorge economy mainly reinforce each other in a happy way except of course when they don’t (water rights in drier areas, for example).

Washington or Oregon? Well, as I said, both, but not a region that clearly fits into the stereotype of either state’s wine industry. Some of the wine people I met were happy to have the Oregon association since that is so clearly defined (and works quite well for the quantities of Pinot Noir grapes grown here, which often end up in Oregon appellation wines from Willamette Valley makers). But obviously it cannot encompass the great variety of terroirs, climates and grape varieties found in the Gorge.

Wine is just too darn complicated to be reduced to a single thing. Even in Oregon. Or Washington. Or wherever the Columbia Gorge is!

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The paradox of the Columbia Gorge AVA is just one aspect of the increasing interwoven nature of the the Washington and Oregon wine industries (and the fact that the Columbia River actually unites these regions more than it divides them). The Walla Walla AVA also crosses the state line, of course, and many “Oregon” wineries have grapes trucked down along the river from Washington AVAs such as Horse Heaven Hills to wineries in the Gorge and the Willamette valley, where they make “Washington wines” in “Oregon” wineries — a good thing for everyone involved in my book even if it adds to the wine region identity crisis just a bit.

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Thanks to Lonnie Wright (The Pines 1852) and Rich Cushman (Viento Wines) for showing us their sides of the Gorge — look for more about their projects in future posts. Thanks to Bob and Becky Morus for making our visit to Phelps Creek possible.  Thanks to research assistants Bonnie Main and Richard Pichler for their expertise and enthusiasm.  Thanks to contributing editor Sue Veseth for research assistance and the photos shown here.

Thanksgiving Leftovers: Black Friday Wine

It’s the time of year when wine writers give advice about what to serve with Thanksgiving dinner. The wine of choice here at The Wine Economist will probably be Pinot Noir that I received in friendly books (Wine Wars) for bottles exchanges with the winemakers themselves: a 2007 Boedecker Cellars “Athena” from the Willamette Valley in Oregon and/or a 2010 Paul Cluver Pinot Noir from Elgin in South Africa. I think they will be delicious with the traditional turkey and fixin’s.

What’s the best part of Thanksgiving? Leftovers are the best part for many of us. Hard to beat the turkey sandwich that you enjoy the next day when the cooking (and clean up) are done. And for some people the best part of Thanksgiving isn’t Thanksgiving at all — it’s the day after, which we ominously call “Black Friday” in the United States.

Here, in the flexible spirit of the holiday, is a leftover column about Beaujolais Nouveau and  Black Friday, reprinted from The Wine Economist November 23, 2009. Enjoy!

A Wine for Today’s Thanksgiving?

Although the United States is not the only country to set aside a day for giving thanks, we like to think of Thanksgiving as our distinctive holiday. It was conceived as a day for deep reflection, but Thanksgiving has evolved into a long weekend of over-consumption and discount shopping. Some of my friends really prefer to celebrate Black Friday, the day after Thanksgiving, when the holiday shopping season formally begins and retailers find out if they will be “in the black” for the year based upon early sales data.

If you plan an Old Time giving-thanks Thanksgiving, then [Beaujolais] Nouveau is not for you. It is not an especially thoughtful wine. It is a sorta soda pop wine; if wine were literature, my friend Patrick points out, Nouveau would be the  trashy paperback novel you read at the beach. Nothing wrong in that — everyone needs an escape once in a while.

The grapes for Nouveau are picked in late September or thereabouts and the only thing that prevents instant sale is the necessity of fermentation and the mechanics of distribution.  It’s still a bit sweet when it’s bottled and sometimes a bit fizzy, too, when it arrives with great fanfare on the third Thursday in November (a week before Turkey Day). Best served cold (like revenge!) it is the ultimate cash flow wine.

Black Friday Wine?

Nouveau is not very sophisticated, so why do the French, who otherwise are known to guard their terroirist image, bother with it? The Beaujolias producers make very nice ordinary (non-nouveau) wines; character complexity, you can have it all and for a surprisingly low price.

Ah, but that’s the problem. Sitting close to prestigious Burgundy, the Beaujolais cannot command high prices for their wines, good as they are, so they must try to make money through turnover more than markup. They churn out millions of bottles of Nouveau to pay the bills.

At the peak of the bubble in 1992 about half of all wines made in Beaujolais were Nouveau. The proportion remains high even today. Ironically, Nouveau often sells at prices as high as Beaujolais’ more serious wines because it is marketed so well. So it is hard to see why you’d want to buy it instead of the region’s other wines. It’s easy, on the other hand, to see why you’d want to sell it.

Beaujolais Nouveau, it seems, is France’s Black Friday wine! If the makers can sell their Nouveau, then maybe the bottom line for the year will be in the black. If the Nouveau market fails, well that red stain on the floor won’t be just spilled wine.

More than the Usual Urgency

Nouveau is therefore generally marketed around the world with more than the usual urgency (just as those Black Friday sales seem a little desperate at times) — and not just because young wines hit their “best by” date pretty quickly. This year things are even more stressful than usual, as you might imagine, with the economic crisis still on everyone’s minds and 10+ percent unemployment here in the United States. [Editor note: the unemployment rate is lower today than in 2009, but the weak economy is still an issue.]

Nouveau is usually distributed around the world via expensive air freight rather than more economic sea transport in part because the short time between harvest and final sale makes speed a factor. This year [2009] Nouveau was bottled in plastic for the Japanese market in part to lower shipping cost — a controversial move that may not be repeated because of its negative product image potential.

Intentionally choosing to adopt a more casual image, Boisset put all its US-bound Nouveau in screw-cap PET bottles, with a resulting 40% reduction in shipping cost. [Note: the PET bottles were not a great success with tradition-bound Thanksgiving consumers and Boisset switched to lightweight glass bottles for Nouveau in later years.]

Here’s a fun video from 2005

An American Wine?

Sweet, fizzy and packed in PET bottles — Beaujolais Nouveau sounds like the perfect wine for American consumers brought up on 2-liter jugs of fizzy-sweet Mountain Dew and Diet Coke. If you were kinda cynical, you would think Nouveau was an American wine … made in USA.

And it is, in a way. Although the wine obviously comes from France (and there is actually a long tradition of simple and fun early-release new wines in France and elsewhere), I think it is fair to say that the Nouveau phenomenon is an American invention.

W.J. Deutsch & Sons, the American distributors, really put Beaujolias in general and Nouveau in particular on the U.S. wine market map when they became exclusive distributors for Georges Duboeuf some years ago. They took this simple wine and made it a marketing event. To paraphrase an old Vulcan proverb, only Nixon could go to China and only the brilliant Deutsch family could sell Nouveau!

In fact they were so successful that they partnered with another family firm — the Casella family from Australia — and created a second wine phenomenon tailored to American tastes: Yellow Tail!

So although Nouveau is an American wine of sorts and might be perfectly crafted for this American holiday as we actually celebrate it on Friday, I’m going to pass this year (on Thursday, at least) and see if I can nurse some thoughtful reflection from my holiday glass [of Pinot Noir!] instead. Cheers, everyone! And thanks.

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Thanks to Athena and Paul for the nice wine — hope you enjoy Wine Wars!