The Genius of Charles Smith and the Land versus Brand Wine Wars

What do you know about Charles Smith? He’s a marketing genius! Where does he get his ideas? Do you know what he is going to do next?1029780x

We were in a restaurant in Yountville, the heart of the Napa Valley, talking with one of the valley’s best winemakers. There was a lot to discuss, but our friend was pretty focused. He was fascinated by Charles Smith.

And that’s not really a surprise. Charles Smith has a reputation as a premier brand builder, a marketing genius. That’s not the whole Charles Smith story, but it is how some people think of what he is and does, especially after the 2016 sale of his Charles Smith Wine (CSW) brand lineup to Constellation Brands for a cool $120 million.

Smith came to Walla Walla to make terroir-driven wines. His first vintage was 330 cases of the 1999 K Syrah made from grapes grown in The Rocks vineyard area supplied by Cayuse winemaker Christophe Baron. The wine was so good, according to an excellent Wine Spectator profile (click for pdf), that it convinced local bankers to help finance the operation. Bankable wine? Quite an accomplishment.

House Wine to Kung Fu Girl

K Syrah is a clever, memorable wine brand (think “Que Sera Sera”), but the commercial branding story really starts in 2003-2004, when a killing frost hit Walla Walla and winemakers like Smith had to scramble to get grapes or bulk wine from other parts of Washington to give them something to sell to pay the bills.

kung-fu-girl-riesling

Smith seized the moment to launch the Magnificent Wine Company and its House Wine lineup. The popularly-priced negociant wines with the fun labels sold out. Everyone needs a house wine — House Red, House White, and so on. Sales quickly scaled.

Precept Brands invested in House Wine in 2006 and purchased the brand outright in 2011. The current lineup includes House Red, House White, Steak House, Fish House, and other House wines packaged in bottles, boxes, and cans.

Charles Smith Wines came next — continuing the House Wine philosophy of giving people what they want in a simple but stylish way, but a step or two up the wine market ladder. Boom Boom Syrah, Velvet Devil Merlot, Eve Chardonnay, Chateau Smith Cabernet Sauvignon and who can forget Kung Fu Girl Riesling — each wine had its own personality and offered buyers lots of quality per dollar.

These CSW wines have two things in common. First, they have distinctive graphic design elements provided by the talented Rikke Korff, who has handled all the design work for Charles Smith since the beginning. The labels are instantly recognizable and always make me smile. Nothing like the staid chateau drawings or cute critter images that many wines feature.

94854

The second common feature is that the wines are good and good value. Kung Fu Girl Riesling, the best-selling wine in the line and a frequent recipient of “Top 100” wine awards, sources grapes from the exceptional Evergreen Vineyard. It’s the real deal.

The Modernist Wine Project

There are a lot of ways to think about the CSW wine program, but the winery website likes to call it part of a “modernist” project. The idea seems to be to look at consumers as they really are and then give them a product that satisfies their needs. This means wines that are ready to drink upon release, that are balanced and taste good with food or without it, and that are affordable and carried to market on a relatively simple message relayed through exciting graphical design.

The genius of Charles Smith was to put all of this together — the wines, the message, the design, the marketing — and to get the project rolling in 2006,  just before the Great Recession hit the United States. The CSW wines offered recession-shocked buyers an opportunity to trade over to a more casual idea of wine, not just to trade down to something a bit cheaper. Mix all this with a lot of hard work in the vineyard, cellar and on marketing and it is no wonder the wines were so successful.

97948

It is well known that I admire this sort of genius. The subtitle of my 2011 book Wine Wars referenced the “Miracle of Two Buck Chuck.” It was indeed a miracle that Fred Franzia and his team at Bronco Wine and the smart folks at Trader Joe’s markets could give millions of Americans the confidence they previously lacked to try and enjoy wine. Charles Smith built upon this foundation with great success and in a particular “modernist” way, first with House Wine and then the CSW brands.

The modernist project continues. Smith will consult with Constellation Brands on the CSW portfolio to help it scale up successfully. And then there is Vino, which was not part of the Constellation Brands deal, a tasty lineup of Washington-grown Italian-varietal wines that are instantly recognizable as a Charles Smith product by their label design and offer an unexpectedly sincere homage to the Italian origins of their grapes.

The Pinot Grigio, for example, has minerality you won’t find in a lot of other wines of this type and the Moscato will remind you a bit of a nice Moscato d’Asti. These wines probably don’t have to be this good to sell at their price points. But they are.

The Battle of Land Versus Brand

It would be easy to typecast Charles Smith as a brand guy in the battle of Land versus Brand. The fact of the Constellation Brands purchase offers some evidence. After all, Constellation is famous these days for paying big bucks for brands that have no vineyards or wineries attached to them.  The Meomi brand was purchased for $315 million and The Prisoner for $285 million, for example.k_syrah_beautiful

Viewed in this perspective, Charles Smith’s experience with House Wine and then the CSW brands seems to typecast him as a very successful brand-spinner — a genius at the game as my Napa Valley winemaker friend pointed out. And what you would expect from Smith is more of the same.

But there is more to Charles Smith than brand-building. The K Vintners wine that started it all back in Walla Walla has evolved into a rather interesting collectiomn of single-vineyard wines (Land not just cool Brand), exploring the possibilities of Syrah and Viognier with side-trips to Sangiovese, Tempranillo and Malbec. An all-Chardonnay line called Sixto offers single-vineyard wines plus a multi-vineyard blend.

Washington’s Randall Grahm?

And so the question must be asked, is Charles Smith Land or Brand? The answer seems to be both, which makes him a complicated person (and maybe more of a genius than my Napa friend realized). Is Charles Smith Washington wine’s answer to California’s Randall Grahm? I dunno. What do you think?

To find out what Charles Smith is up to these days and maybe learn about what comes next we paid a visit a few weeks ago to his Jet City Winery near Boeing Field in Seattle to learn about a particular vision of Land and Brand. Come back next week to see what we discovered.

Big & Hot Wine: Cab Boom, Napa Bubble, Think Pink, Back to the Future?

Last week’s Wine Economist column featured a very basic “Big and Hot” analysis of recent U.S. wine market data, focusing on which parts of the market are the most interesting in terms of “big” total expenditures versus the fastest growing “hot” categories. (If you haven’t read the first column, click here to check it out.)

This week I invite you to give some thought to the implications of that information. Here are a few observations to get you started.

Cabernet Boom, Napa Bubble?hqdefault

Cabernet Sauvignon is both Big and Hot these days. Cab will soon eclipse Chardonnay as the best-selling varietal wine in the U.S. market.

When you combine this fact with the general up-market trend, where the fastest growing parts of the wine market are in the super-premium and luxury segments, it is easy to understand how and why the California wine industry is being transformed by a movement toward quality, with Cabernet Sauvignon in the lead.

The Cab Boom is at its fiercest in the Napa Valley, where sky-high grape prices translate into stratospheric land prices. According to the most recent Allied Grape Growers newsletter (see pdf here),  The average price of Cab grapes in the Napa district was over $6800 a ton. And that’s just the average. The best grapes? If you have to ask how much they cost, you probably can’t afford them.

Cabernet seems to be good as gold generally, especially in Napa.

samuelson

Fool’s Gold?

Or is it fool’s gold? In particular, is the Cab-driven Napa vineyard value boom sustainable or is it a bubble that will someday burst? I think the possibility must be considered.

Agricultural markets in general are subject to what my Econ 101 professor called a “cobweb” model of price dynamics, where today’s high price leads to over-investment, which causes next year’s collapse, which leads to under-production, which brings on a future price spike and so on.

You can see the cobweb graph in this photo of Nobel Prize economist Paul Samuelson. Some cobwebs converge to an equilibrium. Some, like the one that Samuelson drew here, explode.

Wine is different from the standard agricultural commodity that was the inspiration for the cobweb model. Its longer production cycle actually makes the potential for price swings worse than for corn or wheat.

Maybe the current boom isn’t a bubble and I am just doing that Chicken Little thing that I sometimes do.  But it seems to me that you have to take the possibility of a bubble seriously unless you have a very good answer (which I do not yet have) to the question, what exactly makes this time different? 

Rise of the Red Blends

The rise of the red blends, which I discussed last week, is an interesting trend that has persisted long enough to be taken seriously. I admit that I have changed my opinion about red blends over time. Initially I saw Hot red blends as a response to Cold market conditions for Merlot and Syrah/Shriaz. Merlot fell out of favor after Sideways and negative reaction to simple Aussie Shiraz wines somehow turned contagious, infecting Syrah generally.

Consumers, it seemed, didn’t want to buy Merlot and Syrah. But they actually liked to drink them! So surplus Merlot and Syrah, plus a few other varietals, were mixed into market friendly Red Blend. Voilà!  You can be a Merlot or Syrah snob and enjoy drinking it, too. What could be better?

Back to the Future?

But then red blends seemed to change, with different grape varieties in the mix, and attention turned to the surge in sweet red blend wines. The focus was on what the higher residual sugar said about the changing wine market generally.

Now I’m more interested in the fact that many of the most popular red blends are intentional creations aimed specifically at the Hot super-premium market segment. Some of the common characteristics of these wines are that they have strong brand identities that are not linked to particular wine-growing regions (hence California appellation) or specific grape varietal (proprietary blends).

The flexibility that this affords the makers of these wines is very useful as they can alter the blend within reason both in terms of grape varieties and grape source depending upon demand scale and supply conditions.  Customers are buying the brand, not the particular recipe.

In a way these two parts of the red blend phenomenon (sweeter wines and stronger focus on brands over regions or varieties) strike me as a “Back to the Future” trend, a throwback to the 60s and 70s, especially since some of the largest wine producers are responsible for many of the new successful brands that have emerged.  What’s different is that we have moved up dramatically on the price ladder.

Is this the end of varietal wines? No, but it is a reorganization of the market. Varietals were seen to be a step up over generic jug wines. Now some of the proprietary blends are positioning themselves above the varietals. Interesting!

Think Pink

The recent popularity of Rosé wine caught most observers (including me) off guard. Why should pink wines (and even relatively expensive pink wines) suddenly be in fashion? A new documentary is about to be released called “La Révolution du Rosé” — can’t wait to see how the Rosé rise is explained in this timely film.

Is Rosé a thing? The biggest skeptics I have met have been the European wine producers who, ironically, have the most to gain from this trend since they have a lot of good pink wines to sell. They have been burned before and hesitate to make big investments until they are convinced that pink wines is not just another short-term fad.

I have heard many theories about the Pink explosion. Here’s one that’s inspired by last week’s Big and Hot analysis. The Red Blend boom seems to be real. What about the White Blend boom? Well, it didn’t happen. Personally, there are many white wine blends that I love, but there has been no real movement in white wine blends to mirror the changes in red wine blends. Unless, that is, you Think Pink.

Rosé wines have a lot in common with the red blends.  They can be and are made from many different wine grape varieties and are sourced from dozens of countries and regions. Some consumers may be nerdy about which grapes, which regions, and (especially) which particular shade of pink they like best. But many more consumers are open to all sorts of possibilities, judging the wines on their qualities more than pedigree.mateus

Sue and I have been on a bit of a Pink wine binge recently drinking pink Cinsault from Lebanon, pink Cabernet Sauvignon from South Africa, and a variety of different pink blends from various regions in the South of France. They were all delicious and refreshing.

Pink wines are often dry, but they can sometimes be sweeter, too, which fits well with the Red Blend comparison. Maybe we are missing the white wine boom because we haven’t learned how to Think Pink?

So are Pink wines the Next Big Thing. No … but I only say that so that I can finish this column on another Back to the Future note. Pink wine is actually an old thing that has come full circle here in the United States. Don’t forget that one of America’s all-time top-selling Big and Hot imported wines was Proudly Pink.

Can you name it? Yes, I am talking about Mateus Rosé! Think Pink!

>>><<<

 

New “Wine by Numbers” + Analysis of Global & US Wine Market Dynamics

 

wbnA new edition of Wine by Numbers was released a few days ago and it is required reading for anyone interested in global wine market dynamics. Wine by Numbers presents current data about global wine exports, imports and patterns of trade. It is a free resource provided by the Unione Italiani Vini, the Italian wine association.

Who Buys? Who Sells?

This special edition provides more data and deeper analysis, including essays by leading figures in the Italian wine industry about some of the most important export and import markets. Carlo Flamini of the Corriere Vinicola, which publishes Wine by Numbers, asked me to write an introductory essay for the “Who Buys” issue.

My essay presents a “Big and Hot” analysis of global wine market dynamics based upon the Wine by Numbers data. I invite you to download the pdf and check it out along with the rest of this valuable publication.

Writing the Wine by Numbers essay got me to thinking that it might be time to update my “Big and Hot” analysis of the U.S. market, so today’s column is part of an occasional series here at the Wine Economist where we analyze recent U.S. retail sales data looking for interesting and important trends. The data this week comes from Nielsen reports on U.S. off-premise table wine sales for the 52 weeks ending on April 22, 2017 as reported in the July 2017 issue of Wine Business Monthly.

wbm_cover_2017-7-1

Here’s how “Big & Hot” analysis works. The idea is to look at which parts of the market are big (in terms of total sales) and which are hot (or not) based upon rates of growth, both over the 52 week period and in the most recent 4 weeks covered by the data.

Sometimes as we see below, big and hot are the same, but sometimes they are very different. There is often something to be learned in either case.

Big and Hot Price Points

The overall U.S. off-premise market for table wines as measured by Nielsen grew by 3.5 percent in the 52 weeks of this study, but grew at a faster 6.1 rate in the final four weeks, showing some welcome acceleration that might be related to  Easter and Passover holiday wine sales.

This growth was not distributed uniformly over all price segments. This WBM Nielsen report aggregates price data by three dollar increments ($0-$2.99, $3-$5.99, etc.) up to $14.99 and then $15-$19.99 and $20 and above. The Big price segment measured by total expenditure is $3-$5.99 followed by $9-$11.99. The data suggest that the market is increasingly bifurcated  — the $6-$8.99 price segment between the two Bigs is actually shrinking. A tale of two markets?

Value wines are still Big and probably always will be, but they are not especially Hot. The fastest growing price segment is $15-$19.99, where total expenditures increased by more than 10 percent for the 52 week period. Wines priced $20 and above were “Hot Hot.” Sales shot up by 17.6% in the final four weeks of the reporting period. Amazing!

Big and Hot Imports

The Nielsen retail data reported here show that domestic table wines account for about 72 percent of total off-premise sales. Imports are somewhat stronger in restaurants and in the sparkling wine category, too, and if these sales were included the split would be more like 70% domestic and 30% import.

Italy is far and away the largest import wine source in these data (and growing faster than the overall market)  followed by Australia, New Zealand, and Argentina. France, which is only #5 by total sales, leads the hot parade, however, with 15% growth for the year and more than 25% 4-week growth. New Zealand, which normally is top of the Hot table, grew almost as fast followed by up-and-coming Portugal.

While Australian sales were essentially flat (an improvement over their dismal performance in recent years), Argentina, Chile, Germany, and South Africa had falling import sales in the Nielsen data.

Big and Hot Varietals

Conventional wisdom has it that American consumer reach for wine based upon brand, price, and grape variety. Chardonnay is the Big grape variety, accounting for 18% of all wine sales in the Nielsen table. Growth in Chardonnay sales rose slightly less than the overall market in this period. Cabernet Sauvignon, however, is only a little behind Chardonnay after a Hot surge and will soon take over the top place.

Sauvignon Blanc is the hottest grape variety, with 10.8% growth. Pinot Noir and Pinot Gris/Grigio are also growing while many varietal wine types (Merlot, Syrah/Shiraz, Malbec, Riesling, Zinfandel) have flat or falling sales.

Where is the growth going if not to these classic varietal wines? Look to the next category, which I call the Wild Card wines.

Big and Hot: The Wild Cards144318l

The Hottest categories in today’s market are those wines that defy the conventional wisdom. Consumers are supposed to be drawn to the security of varietal wines, so it is a bit of a surprise that the “Red Blend” category is so Hot, growing at more than twice the rate of the overall market during these 52 weeks. “Sweet Red Blends” are even Hotter, with sales rise at more than triple the overall market growth rate.

The conventional wisdom also holds that pink wines are a pretty narrow category and that is true in part. Sales of White Zinfandel, once a really Hot pink wine ticket, fell by 5% in this period.

So the Rosé wine boom comes as a bit of surprise. Sales of  Rosé table wine selling at $8 and above per 750ml rose at a startling 61.7% for the year and 84.2% for the final four weeks of the survey period.

That last number (84.2%) is especially interesting and not just because it is so big. Remember that these Nielsen data cover the period that ended on April 22, 2017, so the final 4-week period included parts of March and April.  Rosé wine was long thought to be “summer wine,” but these surging sales came in early Spring. Maybe Rosé is a Thing now, and not just a summer Thing?

Economists like numbers like these, but what’s the story behind them? Come back next week and I will try to tease out some broader implications.

When is a Wine Tourist Not a Wine Tourist? Lessons from Cyprus

nelionWe were sitting on the terrace at Nelion Winery, perched on the famous Paphos-Troodos road, talking with winemaker Marinos Ioannou and tasting his excellent wines. (We loved a dry red made from the indigenous Ofthalmo grape variety and brought home a bottle to share with friends here).

A Happening Place

Nelion was kind of a happening place while we were there. Lots of traffic, lots of visitors. This is not an accident. The Paphos-Troodos road draws many visitors who come to Cyprus and want to see the signature sights of the island.

Nelion provides a range of experiences for them.  You can taste 3 wines for free or all 9 wines at the bar for €5 per person. Ten euro per head will get you a seated 9-wine tasting on the terrace with cheese and salami and €15 buys a winery and vineyard tour plus the terrace tasting and snack plate.

Tourists are critically important to the winery, which produces around 25,000 bottles each year and sells most of them at the cellar door during the tourist season, supplementing this with bulk wine sales to local residents during the off-season.

We heard lots of languages and accents — British, Russian, Israeli, French — and saw lots of wine go out of the tasting room into waiting cars. Marinos had been in the audience when I spoke at the wine symposium earlier in the week and it is clear that he already understood why I stressed wine tourism as an industry strategy.

No Wine Tourists Here?

nelion3So I was more than surprised when he brought up the topic and said in a matter-of-fact way that there are no wine tourists in Cyprus.

No wine tourists? What about all these people who come here and taste and buy your wine? They are tourists, most of them, but they aren’t wine tourists. And he was right.

So what is a wine tourist?

I often talk about wine tourism in the Napa Valley, where it is a booming industry, and I think the term applies pretty well to what is going on there. Most of the tourists are drawn there by the wine, although maybe it would be better to say that they are wine lifestyle tourists, since wine and winery are not the only parts of the package on offer in the Napa Valley.

In many places including Cyprus, what we think of as wine tourists are really tourists of a different stripe who take advantage of the opportunity to visit a winery and perhaps buy some wine as a sidebar to their main tourist focus. For these visitors, wine tourism is an alternative to the main agenda– something to do when rainy weather keeps you off the beach — or an attractive bonus stop on the road to Troodos, for example.

nelion2

Can Wine Compete?

Cyprus has lots of tourists — I think it is the island’s most important industry now — and has developed several wine routes to help tourists find their way around.  But as Marinos noted, real wine tourists are still few and far between. What needs to happen to change this?

At first glance it is difficult to imagine how wine can compete for tourists in Cyprus. Cyprus has important historical sites and a deep and attractive culture. Cyprus is a playground, with beaches and mountains to enjoy. Cyprus has wonderful food, with many regional specialties. Cyprus was great weather, which attracts European tri-athletes who want get a jump-start on training.  How in the world can wine compete?

Easier Said Than Done

The answer, as you have probably already guessed, is not to compete but to cooperate. Wine is part of Cyprus’s long history, a key component of its culture, and a perfect match for the great food. The key, as work done by the United Nations World Tourism Organization has stressed, is to bring these threads together with wine at the center.

This is not necessarily an easy task. Wine producers in Cyprus struggle at times to work together to promote their national “brand,” so expanding cooperation to include museums, archaeological sites, restaurants, hotels, national and regional tourist agencies and so forth is easier said than done. Creative use of the wine route concept, linking it to other regional structures, may be a good way to begin.

Nelion winery has made a modest start to this. The tasting room is also a sales room for a variety of local foods and some craft items. This shows the winery as embedded in the local community, with its food, culture, and beautiful landscape.

Fostering real wine tourism is not a Cypriot problem — it is everyone’s problem. Everyone who wants to see wine tourism prosper and achieve its great potential to develop wine, wineries, and wine regions has an interest in converting tourists who stop at wineries into wine tourists.

>>><<<

This is the final column in our series on wine and wine tourism in Cyprus. Sue and I would like to thank once again the Cyprus Tourism Organization for inviting us to attend the Cyprus Wine Competition, to visit wineries, taste the wines, and meet such interesting people. Thanks to you all!

The Next New Zealand? Reflections on Cyprus Wine Industry in Transition

pafos“Cyprus wines? Not really sure I have ever had one. Do they make much wine in Cyprus?”

Many readers of this column would probably say something similar when asked about Cyprus wine, but the person I was talking to was a bit different.

I spotted him on the Lufthansa flight from Frankfurt to Seattle and remembered that he sat in front of me on the earlier Larnaca-Frankfurt leg. He did business in Cyprus and traveled there a lot, he told me. Drank wine there, too. But Cyprus wine? Not so much.

Mostly he drank the less expensive import wines while he was in Cyprus — wines from Spain, Chile or Australia. Maybe he tried one from Cyprus, he thought, but mainly he stuck with the value import wines.

In this respect my new friend’s consumption pattern reflects the Cyprus wine market in general. When Cyprus entered the European Union back in 2004 its ability to protect its domestic wine industry from cheaper imports was greatly diminished — imports account for about two-thirds of Cyprus wine sales now — and a new wine regime began to emerge.

Regime Change 101vasilikon

Unable to compete with very efficient international value wine producers, Cyprus had no choice but to reconfigure its wine sector to move up the quality (and price scale). And while Cypriot wines are not expensive by American standards (a bottle of truly excellent Vasilikon Xynisteri dry white wine cost less than $20 at a seaside restaurant in the tourist district — what a steal!) they are necessarily priced above the imports.

This was my first visit to Cyprus, but not my first experience with the types of changes that Cyprus wine is experiencing. My native Washington State, for example, had to make the quality leap in the 1960s when the “California Wine Bill” was passed by the legislature in Olympia and cheaper California wine flooded into the local market. The forced upscale move was the best thing that every happened to the wine industry here.

New Zealand faced the same sort of situation in the 1980s, when the collapse of their protected wine sector forced a dramatic economic course correction. Imports flooded in, foreign investment came, too, and a new export-oriented quality wine industry emerged. New Zealand today has the highest average export price of any country for still wines — an amazing achievement.

I found a similar story in Canada, which was forced to liberalize wine trade with the U.S. when the Nafta agreement was signed in the 1990s. In order to be competitive winegrowers in the Okanagan had to replace their hybrid vines with vitis vinifera — an expensive investment. But the results have been amazing.

The transition from volume to value is never easy and is always controversial (my South African friends can attest to this). Not all firms or regions will make it through the process successfully (there is a “survivor bias” to the data), but the success stories are compelling. This is the world that Cyprus wine has entered.

Revolutionary Vanguard

promara

Revolutions always have a vanguard. As is often the case, some winemakers took the first steps to higher quality before market conditions made this a necessity and we visited several of these pioneering wineries (see complete list below). One that stands out in my mind is Vouni Panayia Winery in the mountains near Pafos, which was the first private regional winery in Cyprus.

Vouni Panayia was founded in 1987 by Andreas Kyriakides, who had previously worked in the enology and viticulture section of the Department of Agriculture and so had a good understanding the Cyprus wine sector. He and his family set out to achieve quality at a time when quantity was still a strong factor and to do it using indigenous grape varieties at a time when international varieties were in vogue.

Kyriakides bet on his vision of the future and the family’s efforts have paid off. Sue and I were impressed with the deep red  Yiannoudi, which went so well with the roast lamb at lunch, and the delightful dry white Alina (made with Xynisteri variety). The white Promara (indigenous Promara variety)  was fantastic — a desert island wine candidate!

Going Native?

Vouni Panayia Winery might have helped start the quality revolution in Cyprus, but they have had plenty of help. The movement is advancing rapidly today and seems to be ready for the next challenge: gaining greater traction (and higher prices) in the domestic and carefully chosen export markets.

My first thought when I tasted some of the wines was that Xynisteri could be the key to this next stage — it is a delightful dry white wine that would appeal to Sauvignon Blanc drinkers. That first bottle of Vasilikon Xynisteri was followed by several others of that variety from various producers and we never had one that wasn’t delicious.

wine

This observation led, of course, to the idea that indigenous varieties should be the prime focus for both red and white wines. Vouni Panayia certainly makes a strong case for the indigenous grapes of Cyprus.

I still believe in the Cypriot native varieties, but as we tasted more and more wines I realized that Cyprus winemakers can do wonders with some of the international varieties, too. Maybe a hybrid strategy is called for.

My heart wants indigenous variety wines that are not found anywhere else in the world, but my pragmatic head says that Cypriot winemakers should make the best wines they can out of other grapes, too. We had wonderful Syrah and Cabernet Sauvignon. Why not? So long as native varieties are not forgotten. The quality of the best of these wines is so high that I think they will thrive.

The Next New Zealand?

So, to return to the headline at the top of the page that I teased you with, is Cyprus likely to be the next New Zealand — a small, almost forgotten wine-making island that makes the transition from volume to value with spectacular success?

It is not a ridiculous question. Back in the mid-1980s not many could have imagined much less boldly predicted the amazing growth that New Zealand has achieved in the last 30 years. That same conversation (Do Kiwis make wine?) that I had about Cyprus at the start of this column could have been about New Zealand wine back then.

That said, Cyprus is not likely to be the next New Zealand. No one is. New Zealand’s unexpected success was the product of global market conditions that don’t exist in exactly the same way today due to the rapid expansion of wine production in other New World nations. The market space that New Zealand has been able to fill doesn’t exist in the same way for other wine exporting countries any more.

But Cyprus doesn’t have to be the next New Zealand to be successful. Wine-makers on this small island have great potential and if they can only work together to realize it in domestic and international wine markets, that will be good enough.

Maybe in 30  years we will ask if some other country has the potential to be the next Cyprus? Wouldn’t that be delicious!

2017 Cyprus Wineries Visited

Ezousa Winery

Nelion Winery

Tsangarides Winery

Tsiakkas Winery

Vasilikon Winery

Vlassides Winery

Vouni Panayia Winery

Zambartas Winery

Back to the Future? First Impressions of Wine and Wine Tourism in Cyprus

c2

Cyprus is known for many things: culture (fantastic archaeological sites), cuisine (haloumi, the wonderful grilling cheese), international politics (the ongoing dispute with Turkey over the island itself), and tourism (beautiful beach resorts).

Cypriot wine? Probably not on your radar for reasons I will explain in next week’s column. But that wasn’t always the case. Commandaria, a wonderful sweet wine, was once treasured throughout Europe along with Tokaj, Sauternes, and Vin de Constance. Cyprus Sherry was popular, too, and bulk wine exports once found their way to Russia, the UK, and elsewhere.

Cyprus wine today? Not much seen outside of Cyprus. But that might be changing. Stay tuned.

Pafos: Cultural Capital of Europe

Sue and I came to Cyprus as guests of the Cyprus Tourist Organization to attend the 10th Cyprus Wine Competition in Pafos and spend several days exploring wineries and wine tourism opportunities. This is the first of several columns that report what we learned from this fascinating experience.

Our first day in Pafos was spent recovering from jet lag and taking in a few sights. It was a short walk from the luxurious Almyra Hotel  where we stayed to the archaeological park (a Unesco World Heritage site!) where we saw beautiful mosaics featuring wine-swilling Dionysus (how appropriate) and saw the Berlin Philharmonic Orchestra was setting up for a lunch concert.

Wait! The Berlin Philharmonic? Yes. Pafos is a European Capital of Culture for 2017 and there is a fantastic line-up of events planned for the year. The concert was sold out, so we couldn’t stay, but we could hear the music quite clearly from the balcony of our hotel room. A sweet introduction to Cyprus!

Cyprus Wine Industry Symposium

It was back to business the next day. I gave a keynote speech to a Cypriot wine industry symposium that also included speakers from OIV, local university research projects, and the head of the wine competition.  Panos Kakaviatos, who was part of our group of international visitors, has written about this event and the Cyprus wine industry more generally on his blog Wine-Chronicles.com — you should check it out.

I spoke about the lessons that can be learned, both positive and negative, from successful wine regions and several of the points I made seemed to strike a chord with the Cypriot winemakers. Here’s a quick summary of the key take-aways.

Competition versus Cooperationc1

Wine is a very competitive business, but one lesson I have learned is that successful wine regions find ways to set aside retail competition to a certain degree in order to cooperate to build reputation and the regional “brand.” Cooperation is the key, both among wineries and also with local and regional tourist and government authorities.  There really is strength in numbers.

This simple point seemed to resonate with many people in the room who commented about it later that day and when I talked with them later in the week, too. Everyone seemed to believe that Cyprus wine players need to learn to work together more effectively and to build the public-private partnerships that are so useful in other wine regions.

I sensed that there was pent-up frustration about the lack of teamwork. My goal in giving talks like this one isn’t so much to tell people what to do as to give them something to think about and if my remarks stimulate some thought and eventual action in this regard I will be very satisfied.

Wine Tourism Leverage

Since we were visiting as guests of the tourist authority, I spent a little time talking about how important wine tourism can be, not just to sell wine, but to create brand ambassadors who will carry the story of your winery and region with them when they go home. Cyprus has the raw materials — excellent wineries and world-class tourism infrastructure. Leveraging these resources through wine tourism seems like the logical next step.

But it will take work (and teamwork) to accomplish this. One winemakers told me frankly that no wine tourists came to his winery. Plenty of tourists visited — they stopped by, tasted wines, and made purchases. Indeed, his winery could not survive without the tourist trade.

But they are not wine tourists, he said. The haven’t come to this part of Cyprus because of the wine.  Creating real wine tourism, where wine drives the agenda, that’s a challenge.

One Wine to Rule Them All?

Readers of this column already know the I am skeptical of the idea that every region needs to have a “signature variety” of wine. Napa has Cab, Argentina has Malbec, New Zealand has Sauvignon Blanc. We need to put all our chips on one grape variety to power our wine industry, too. That’s the conventional logic and I have my doubts.53994_lg

As it happens, Cyprus is having its own “signature” wine discussion just now and so my comments got some attention. Commandaria (a.k.a. “the world’s oldest wine”), we were told, was the key to raising the international profile of Cypriot wine.  The Cyprus wine people we talked with were convinced about this. Commandaria will lead the charge and the other wines will gallop behind to victory.

The “internationals” in our little group were unconvinced by this strategy and hopefully our comments were helpful even if we really didn’t change anyone’s mind. Commandaria is a sweet wine, we said, and sweet wines are a small category and a tough sell around the world today. Port struggles to get traction. Commandaria faces a steep climb.

The thing about Commandaria is that it is unique to Cyprus and has a distinguished history. But I am not sure that the wine is well known outside of traditional markets and so selling it requires expensive consumer education resources, which might more effectively deployed elsewhere.

It might be better to have another wine lead the way, one that fits into a more popular market segment. Xinistera, for example, a delightful dry white wine with instant appeal.  More about this is future columns.

Everyone Loves a Winner

Finally, I noted that many wine regions use wine rankings and competition results to promote their wines. Consumers are drawn to lists and ratings like the Classification of 1855, for example, or the Wine Spectator Top 100. I suggested that Cyprus had some work to do to get the word out about its finest wines in this way.

The wine competition we came to Pafos to attend, for example, seemed to be a Cypriot secret. It was difficult to find any mention of it on the internet. And the results from previous  years were nearly impossible to find. A missed opportunity to cultivate interest by promoting the best that Cyprus has to offer.

It didn’t take long for this message to sink in and for action to be taken, which is great. I am hoping that the 2018 wine competition will more thoroughly publicized and that the wineries will be able to leverage the results more forcefully, both in domestic and export markets.

In the meantime, the 2017 Decanter World Wine Awards results have been released and 78 Cypriot wines received recognition. That’s a great opportunity for the Cyprus wine industry to blow its own horn and for consumers to begin to learn about the excellent wines made on this beautiful island.

>>><<<

Greetings and thanks to everyone we met on our brief visit to Cyprus. Special thanks to Maria, Panos, Per, Jean-Claude, Dimetri, Georgios, Patrick, Pambos, Mary, and Nektarios. (More thanks to come in future columns.) Come back next week for an analysis of the state of the Cypriot wine industry today and the unexpected history behind it.

Goodbye Columbus? Three Variations on a Barcelona-Based Wine Tourism Theme

kvesp1089pThe monument to Christopher Columbus at the foot of the Las Ramblas promenade must be one of the most-viewed sights in very scenic Barcelona. Standing atop his tall column, Columbus points to the sea, an act that makes sense both for Columbus himself and for Barcelona, a city that has long turned its face to the sea and to the international influences that it provides.

Columbus points to the sea — that’s what people think he is doing. But I have another, somewhat less literal theory. I think that he is really pointing, in a vague and perhaps somewhat misguided fashion, away from Barcelona’s bright city lights and toward the not-too-distant vineyards — to the Penedés and Priorat wine regions. Tourists, he is saying, you need to visit wineries and learn about Spanish wine!

My evidence? Wishful thinking, of course (reinforced by a poor sense of direction),  but more significantly this fact: if you walk down the stairs in the base of the Columbus’s column you will find not a maritime museum as you might expect but a wine tourism center, there established to help you enjoy winery visits in this region.

Visitors to Barcelona really should make time to visit wineries — and many thousands of them do. Columbus was busy during our visit, so we relied upon FEV, the Spanish Wine Federation, to organize our itinerary. Here are three case studies that show different sides of wine tourism in this part of Spain.

Arte Nouveau Cava at Codorníucodorniu

History is an important part of any visit to Codorníu-Raventos. Josep Ravenos was the first to make a Spanish sparkling wine using the traditional method and it is a leading producer of Cava wine today.

Codorní receives about 80,000 guests each year and most of them begin their visit in the extravagant arte nouveau hall that you see here (the exterior architecture is just as fascinating and unique). The tour makes good use of the beautiful gardens, which hold many delights including a fascinating wine museum in another striking arte nouveau building.

We met with the  head winemaker, who was excited help us understand Cava today and to show us the lab where he experiments with micro-fermentations in a constant effort to raise quality and draw out new expressions of Cava. It was an intense and fascinating visit.

freixenet

Take the Frexinet Cava Train

The architecture is distinctive and historic at Freixenet, but what’s inside the building (and underground, too) was more the point here. We walked down, down, down — deep underground — to the miles of tunnels where Cava was stored for second-fermentation in the bottle for many years.

Like most of the 90,000 visitors who come here each year, Sue and I boarded a small train to tour the tunnels — if you have visited Champagne you may have taken a similar ride there. One of our stops was at the yeast lab — Freixenet believes that their distinctive yeast variety is one key to the unique quality of their wines and so they put much effort into yeast research. Fascinating.

A special tasting was set for us with Pedro Bonet, head of the Freixenet winery family and President of the Cava DO. The goal of the exercise was to show us the enormous diversity of Cava and it was an eye-opening experience. Cava isn’t one thing or two, but a whole spectrum of tastes and aromas. Delicious!

Both Cava winery visits impressed us with the fact that while Cava is a product that uses traditional winemaking techniques, it is also constantly changing both to improve quality, develop new expressions of the wine, and to achieve more efficient production. The market for sparkling wines is very competitive — both among Spanish producers and between them and international rivals. Robots and machines now replace workers where possible for routine jobs, freeing human creativity for higher tasks.

There was much more to see and do at Freixenet, but we had to move on. Lunch was waiting at our next stop!

The Torres Experience

winedayOne of the brochures we found at the wine tourist center at the base of the Columbus monument was for Miguel Torres. “Wine Day at Torres Winery” presents a number of options for Barcelona tourists including a seven hour guided bus tour with stops at Torres, Jean Leon and Saint Sadurni d’Anoia wineries for €71 (children under 8 ride free) or an 8 hour guided bus tour with stops at Torres, Montserrat (with tastings of traditional liqueurs), and a tour of scenic Stiges for €63.

Not everyone likes a bus tour so train and auto options are also on offer. Take the train from Barcelona to Vilfranca del Penendés, for example, then a shuttle to the nearby Torres winery for a visit, tasting, and return trip with a tour of the scenic village.  The trip lasts about 5 hours and costs just €15. I think it would be very pleasant way to spend a day riding the train, seeing the countryside and enjoying the wine experience, too.

There are many options for Torres wine tourists with their own transportation, which you can view at the Club Torres website.   Our tour of Torres began with lunch at the winery’s Restaurant Mas Rabell, which features a daily set menu of traditional cuisine paired with Torres wines, of course. What a great way to taste the wines! We enjoyed chatting with Miguel Torres, who had attended my FEV talk in Valladolid and asked the toughest questions.

Then we toured the Mas La Plana vineyard and winery with a winemaker. The vineyard, planted to Cabernet Sauvignon vines, redefined the idea of wine in this region and the Mas La Plana wine, which has its own winery, raised the bar, too. The tour stressed quality, innovation, and sustainability.

Torres, Freixenet and Codorníu are three case studies of wineries that have invested in wine tourism and are gaining the benefits, both for themselves and their communities. They are great role models for other ventures around the world.

>>><<<

Goodbye Columbus and Barcelona, too. Sue and I loved visiting the city and learned a lot at our winery visits. Thanks to everyone we met for their kindness and hospitality.