Save the Dates: Wine2Wine 2020, WineFuture 2021, Unified Symposium 2021

The Wine Economist’s World Tour will be back on the (virtual) road in the next few months. Here are preliminary details about upcoming events that might be of interest to readers of this newsletter.

Wine2Wine 2020

The 7th edition of Wine2Wine, Focus 2020, will take place November 23-24, 2020. Usually held in beautiful Verona, this year’s program will be virtual.  The wine business in the post-COVID-19 era is the over-arching theme.

Focus 2020 features a quite fantastic group of speakers and topics. The program is wide-ranging and of course economic topics are accorded due attention. I will be talking about the problem of unstable exchange rates in the new normal economic environment, for example, and another session will analyze the prospects of peace in the US-EU trade war, where wine is caught in the crossfire.

WineFuture 2021

WineFuture 2021 is an ambitious event designed to help wine industry actors make sense of the perfect storm caused by simultaneous economic recession, COVID-19 pandemic, and global climate crisis. The event is scheduled for February 23-25, 2021.  I’ll be speaking about economic challenges and opportunities. The list of speakers is a who’s who of the wine world, so I’m flattered to be invited to participate.

Although the official event is a few months away, the important issues that need to be discussed won’t wait, so WineFuture is organizing a pre-conference series of free weekly webinars on key topics. Rabobank’s Stephen Rannekleiv and I will analyze some of the key economic issues in the first webinar on November 4, 2020.

Unified Wine & Grape Symposium

The Unified Wine & Grape Symposium is North America’s largest wine industry gathering. Both the conference and trade show, scheduled for January 26-29, will be on-line in 2021. The program, still in development, will be released in a few weeks and I get the impression that it will be even more ambitious than in previous years if that’s possible.

I will once again be moderating the State of the Industry session and making brief comments about the global wine economy. I wish we could all meet up in person in Sacramento, but that’s not really an option this year. So I look forward to seeing everyone on-line.

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Use the links above to learn more about these events and check back frequently to get updated information.

Book Review: Getting to Know Saké

Brian Ashcroft (with tasting notes by Takashi Eguchi), The Japanese Saké Bible (Tuttle Publishing, 2020).

Saké has always been a mystery to me. I have only been served it a couple of times and never with much in the way of introduction. Lacking background and appreciation, I have generally defaulted to beer on occasions when Saké might have been the more interesting choice.

Getting to Know You

I never got over the first hurdle. The upscale supermarket down the street (the one that I wrote about in Wine Wars) displays Saké over in the corner next to the Port, Sherry, Madeira, and Vermouth. This is not necessarily a poor organization, since Sakés are generally fortified, but there is a certain ghetto effect, too.

I was surprised when I looked closely at the Saké wall and discovered more than two dozen choices, including two craft Saké selections by Momokawa in Oregon. Lots of choices –big bottles and very small ones at all sorts of price points. And while some of the terms on the bottles were familiar enough, the language barrier was impossible to ignore.

Clearly a resource like The Saké Bible  is needed to open the door to understanding and appreciation. The book, colorfully illustrated and written in a casual, engaging way, provides a good introduction for newbies like me without ignoring the interests of  more experienced Saké drinkers.

Getting to Know All About You

We begin at the beginning. What is Saké? It isn’t beer even though it is brewed and it isn’t rice wine as is sometimes said. Saké is Saké. It is made with five ingredients, according to Ashcroft, but in ten thousand ways. The ingredients are rice, water, koji, yeast, and soil (so terroir is part of the story for some Saké). Koji is a fungus that breaks down the rice’s starch into sugar during the brewing process.  Each ingredient has many variables and options, adding to the product’s complexity.

I found something interesting on every page of this book. Some of my favorite parts are the chapters that trace the evolution of the Saké industry from  temple to small breweries to producers with global reach. Craft Saké is a thing now, as you might guess, and so both tradition and innovation are flourishing in Japan and around the world (Saké is brewed in Brooklyn these days — of course!).

I was also fascinated by the chapter on tasting Saké and pairing it with food as well as the detailed tasting notes for 100 top drawer products. The tasting notes encouraged me to think in terms of wine, which I found comforting. But there were some complications because Saké can be enjoyed at many different temperatures — and getting the chill right can be important.

One of my favorite tasting notes explained that a particular Saké  displayed a brightness when chilled, but evolved with syrupy apricot sweetness at warm room temperature. Served piping hot it had a mellow silkiness like milk chocolate. But in between room temp and hot was a no fly zone — “rather unpleasant” according to the notes. Interesting.

Getting to Know What to Say

The Saké Bible tells you everything you need to know about Saké in theory, but where do you begin in practice? From a practical standpoint, which of the many Sakés on the shelf is best for a newbie consumer? The cheapest? The most expensive? The one with the prettiest bottle or label? (Some of them are very attractive).

I wrote to author Brian Ashcroft for advice and he told me to begin at the beginning, just as most of us did with wine when we were starting out.

The drink itself is incredibly approachable and unintimidating. To be honest, start there. Try sake. Drink it. Don’t get bogged down. Find what you like. If you enjoy a specific type or brand, make a note and remember it for next time. But as with wine, always be willing to try more. For any food or drink, your senses are your best guide, and the more experience you have with the drink, the more you’ll appreciate the various brands and styles. The good thing is that there is lots of breathing room in how you enjoy the drink because one of the best things about sake is just how flexible it is–you can drink brews at a variety of temperatures, in different style cups and glasses, and with a range of food. Experiment. Explore. Have fun.

Have fun! That sounds like good advice. So, armed with The Saké Bible, I returned to my upscale supermarket in search of a particular style of Saké called Ginjo. Ginjo is made with highly polished rice, giving it a more delicate and refined flavor. It is good both at room temperature and chilled. Expect fruity or floral flavors.

Getting to Like You

The clerk at my store told me they sold quite a lot of Saké. My choice was a 300 ml bottle of Shirayuki Junmai Ginjyo Saké made by Konishi Brewing Co. in Hyogo Prefecture, Japan, which is a historic center of Saké production. Ginjyo is the style, Junmai means that it is made with rice only in the classic tradition.

Served chilled, the nose was full of melon aromas, with melon and cream on the palate. Creamy texture. I could sense the warmth of alcohol, but no harshness. Surprising and much different from my vague memories of previous Saké experiences.

I don’t know how far I’ll go in my exploration of Saké.  I feel like I have only scratched the surface of wine and that wine not Saké is likely to be my focus for years to come. But, for me, trying to get up to speed with Saké is important because I think it might help me understand something about the barriers that wine consumers face when they start out.

Things I’m Learning About You

Think back to your first experience with wine. Unless you had a patient guide you probably stumbled over hurdles of various sorts and sizes, including vast number of choices, wide range or price points, foreign terminology, government health warnings, and the occasional need for specialized equipment just to open the bottle.

Everyone is a newbie at some point and maybe the wine industry needs to give a bit more attention to lowering hurdles for the next consumer generation. Jamie Goode recently pointed out that, for most people, the first taste of wine wasn’t a thrilling experience. How can we give newbie consumers the confidence they need to take a second sip?

Two Buck Chuck worked a miracle drawing a generation of cautious consumers into wine. Now I wonder if they might go for hard seltzer instead, which is far from a gateway to wine.

Have fun! Are there other things we can learn from the success of Saké and its growing global following? Food (or maybe drink) for thought!

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Getting to know you? Here are the singing Lennon Sisters, just in case you didn’t catch all the musical references above. Enjoy!

Book Reviews: A Hedgehog and a Fox Walk into a Wine Bar …

So a hedgehog and a fox walk into a bar and they naturally fall into a debate about wine.

The clever fox, as anyone who has studied Isaiah Berlin’s famous essay will remember, knows many things and sees wine in terms of its complex contradictions. The hedgehog knows one big thing and returns to that again and again. The conversation ebbs and flows and many insights are revealed as the glasses are drained and refilled.

That’s the way I imagined this book review column developing although, as you will see, the plan breaks down a bit (for the better, I think) in the end.

The Fox: 50 Shades of Red

The fox in my story is Jamie Goode, the respected wine authority who frequently draws upon his science background to help us analyze and understand the world of wine. That’s what he did in his 2016 book I Taste Red: The Science of Wine Tasting.  The literature on sensory science is broad and deep and Goode does what he does better than just about anyone — he makes the science clear and applies it to questions that wine enthusiasts will find interesting and important.

The title of the book — I Taste Red — teases the reader a bit. How can you taste Red? Red is a color, not a flavor. How can that be? But taste is pretty complicated (a foxy kind of thing) and, while we assume that it is all about what goes on in your mouth, sipping and slurping, the brain actually uses a lot of clues to come up with what we think of as flavor.

Sue and I have experienced this in simple but memorable terms on a couple of occasions. We put clothes-pin devices on our noses during a multi-sensory perception demonstration at The Shard in London for Wine Vision 2014, for example, and popped jelly beans into our mouths. Nothing. No taste whatsoever. Then we removed the pins and suddenly flavor overwhelmed us. Where did that come from?

On another occasion we listened to music selected by post-modern winemaking guru Clark Smith. He switched tunes while we were tasting a particular Chardonnay and the flavor of the wine changed in our mouths from sweet to bitter. Incredible. I guess the part of the brain in charge of tasting wine overlaps with the part that enjoys music and sometimes they work in harmony but other times (like this one) dissonance erupts.

Topics covered in Goode’s book include wine and the brain, wine flavor chemistry, individual differences in flavor perception, and why we like the wines we like. He even analyzes the language of wine to see if what we say about wine affects what we think and what we taste — and if cultural differences enter into the picture. This chapter reminds me of my newspaper editor friend David who, upon tasting a particularly nice wine, complained that he couldn’t fully appreciate it until he developed a richer vocabulary.

So the science of taste is pretty complicated and interesting and I recommend Jamie Goode’s book to anyone who wants to know more about it. Which brings me to the hedgehog in this story, who is Nick Jackson MW, author of the new book Beyond Flavour: The Indispensable Handbook for Blind Wine Tasting.

The Hedgehog: To Flavour … and Beyond!

Nick Jackson worked very hard to prepare for the blind tasting part of the Master of Wine exams, but he was unhappy about his progress. He was pretty good at getting the right answer, he tells us, but he wasn’t confident. He couldn’t shake the sense that he was often just guessing. Flavor was his guide and, as the fox knows, flavor is not a simple reliable thing. But what else is there to serve as a guide in identifying wines?

His ah-ha! moment came when he realized that tannins (for red wines) and acidity (for whites) were fundamental building blocks. White wines can be known by their level of acidity, for example, the type of acidity, and the shape of the acidity. Chenin Blanc, for example, has high, bracing acidity with a crescendo shape. Crescendo! Think about that.

Chardonnay, on the other hand, has a more linear acidity structure — it remains the same during the act of tasting, pulling the fruit forward with it. Sauvignon Blanc, on the other hand, has jagged acidity.  Think about your experiences tasting these wines. Do these descriptions make sense? Jackson provides similar analysis for tannins in red wine. Structure, in Jackson’s able hands, is a tool that reveals important wine traits — grape variety, region of origin, even vintage, with special sections on sparkling, sweet, fortified, rosé, and orange wine.

Jackson’s book is intended as a guide for wine enthusiasts who are studying for blind-tasting exams like those in the Masters of Wine program. That would seem like a pretty narrow audience, but a peek at the book’s Amazon.com page reveals strong high sales ratings and more than four dozen reader recommendation. Maybe the world of people who need to identify wines in a blind tasting situation is bigger than I thought.

Or maybe there is another reason this book is so popular. I find the focus on structure instructive and that it adds to my enjoyment of wine. I rarely taste wines blind, but I always like to think about them and acid/tannin structure adds a new dimension.

Contradictions?

I said at the beginning that the fox and hedgehog dichotomy doesn’t completely hold here and it is true. I’m not disappointed, however, because that’s actually an important point in Isaiah Berlin’s original essay. While Jamie Goode tells us all the different perspectives that science reveals about wine taste, in the end he has some doubts. All these factors are there, he says, but isn’t a person’s taste  ultimately a single thing? Does it really help to break down taste into so many pieces when the actual experience of wine is or should be a harmonious whole? The fox theorist is drawn haunted by a hedgehog ideal.

Jackson makes a convincing case for his focus on structure and his students, many of whom are studying for the MW exam, benefit and sing his praises. But, towards the end of the book, he moves beyond identifying a wine to assessing wine quality. Is this wine good? Excellent? Great? He tells us that many students struggle with moving from objective to subjective. It is a more complicated issue that needs to be approached in a different way.

A hedgehog and a fox walk into a bar and come out a few hours later understanding more than  you might guess about wine … and themselves.

Book Review: Wine & the White House

Wine and the White House: A History by Frederick J. Ryan, Jr. (White House Historical Association).

wh2President Trump doesn’t drink beverage alcohol and neither does Vice President Pence, and yet wine is a constant at White House state dinners and similar events.  What’s served is nice wine, too, according to records found in this rather fascinating new book.

A state dinner for French President Macron on April 24, 2018, for example, included Domaine Serene Chardonnay (Oregon), Domaine Drouhin Pinot Noir (Oregon), and Schramsberg Cremant Demi-Sec sparkling wine (California).

Apart from the Prohibition years (when, if there was wine in the White House, it wasn’t served in public settings), wine has always been a White House staple and having your wine served at a state dinner has been the ultimate celebrity endorsement.

Wine and the White House is a big book (more than 400 pages), beautifully produced, generously illustrated, and full of information. It is not a book to read from cover to cover, but rather something to dip into and enjoy. There are wine-driven profiles of each president in one section, an examination of the White House collection of wine glasses, decanters, and other wine paraphernalia,  and even surveys of the different wine regions (and some of the producers) that have featured at White House events.

The author, Frederick J. Ryan, Jr., is Chairman of the Board of the White House Historical Association, a perch that gives him access to important source material. He was Assistant to the President under President Reagan, the founding CEO for Politico, and is currently the Publisher and CEO of the Washington Post. 

This book was created with a diverse audience in mind. There are sections on wine basics, for example, for history buffs who might not know a lot about wine. And there are other sections to guide wine people who might not have brushed up on their American history in a while. And, of course, there is a lot of material that both wine people and history people will find new and interesting. You can pretty much open any page at random and find something you are happy to look at or read.

The chapters that I like best focus on the wines that presidents served to their guests at state dinners and similar events.  There are menus going back to 1877, for example, with relatively complete data (including reproductions of the actual menus) starting with the Eisenhower White House years. I’m interested in these documents because they give a sense of how Americans and their leaders thought about wine in the postwar years and how those attitudes evolved.

f4758b03499942eadac83252f0119173Fine wine meant European wine in the 1950s. Eisenhower’s guests were only very occasionally served anything else. A typical Eisenhower state dinner started with Dry Sack Sherry, Spain, and then moved on to  Chateau Climens Barsac, France, and what is listed as Beaune Greves Burgundy, France. Pol Roger Champagne, France, brought the evening to a close. There were variations, of course, for particular guests. German Rieslings for Chancellor Adenauer and Lafite for Winston Churchill.

The Kennedy years saw the the range of wines broaden (more Rieslings and Soave, for example), but generally within a classic old world frame. Noteworthy: increasing presence of American wine (especially Almaden and Inglenook) and I noted Lancer’s Rosé from Portugal served at a luncheon for the Danish Prime Minister. Inglenook “Pinot Chardonnay” appears several times, a reminder that Chardonnay was still little planted in California in the 1960s and often went by this now-forgotten name on bottle labels.

LBJ’s White House dinners embraced American wine wholeheartedly, a trend that has continued. It is as unusual today for an international wine to be served as it was 70 years ago to see a domestic bottle on the table. The White House wine people were ahead of consumers more generally, especially early on, in their willingness to serve American wines to important guests.

It is also interesting to note that the range of American wines, once the trend got started, rather quickly moved beyond California (although that state’s wines still dominated). White House wine selections make a statement and it seems that this is intentional at least some of the time. Can you guess which president first served Texas wine or Michigan wine? Washington and Oregon have joined California as White House regulars.

Wine and the White House is a book that it would be fun to give or to receive.  Pour a glass of fine Madeira (a wine that Jefferson bought by the pipe according to a reproduction of his inventory sheet) and enter this unique world. Wine and history pair very well indeed.

Wine Book Reviews: Three Faces of Global Wine

Here are brief reviews of three recent books that approach global wine from very different perspectives. Each makes a distinctive contribution to our understanding and appreciation of wine. Together they suggest what a complex world it is and why so many of us find it endlessly fascinating.

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https__m.media-amazon.com_images_i_41tumphtglHugh Johnson’s Pocket Wine Book 2021 (Octopus Publishing Group, 2020).

Hugh Johnson’s pocket guide to the world of wine has been a hugely popular standard reference ever since it was first published 43 years ago. Updated annually, it packs a lot of content into a compact package. The Hugh Johnson pocket wine book is required reading for consumers and trade alike.

You will find something for all interests here: a vintage guide, new wines to try in 2021 (think Austria and the Iberian Peninsula),  a survey of grape varieties, a pretty interesting primer on pairing food and wine (what do you suppose goes best with haggis?), and for the new edition a special color section on terroir.

The foundation of the book and its success is a survey of world wine organized along classical lines, which means vintages, countries and regions, the wineries, and the wines. The wineries are rated on a four-star scale with brief commentary and noteworthy wines  are singled out. Obviously it is impossible to cover every winery and every wine, so it is interesting to go through the book to see if favorite wineries made the cut or not.

newyorker_mar291976_1What does the world of wine look like from Hugh Johnson’s classic perspective? Well, it reminds me a bit of that famous Saul Steinberg New Yorker magazine cover that showed a NYC resident’s view of America.

The first thing that Johnson sees when he surveys the wine world is France, and it is hugely important. Indeed the section on France is 80 pages long, of which 20 pages are devoted to Bordeaux. By comparison Asia, which includes China, India, and Japan, has one single page. All of South America wine — Chile, Argentina, Uruguay, Brazil, and more — fills less than 10 pages. No doubt about it — France rules the world of wine and readers who want to understand and appreciate wine need to start there.

The United States gets about 30 pages (with individual sections for the most important wine-producing states), which is about the same as Italy even though Italy produces much more wine and has a much more complex regional wine structure. Given everything, I have no complaints that wine from my home state Washington gets only about four pages — that’s more or less the same as the space given to Cyprus, Israel, Lebanon, Turkey, and North Africa … combined!

Is this a distorted view of the world of wine? Well, yes. But the lesson of the old New Yorker cover was that any single perspective on a complicated subject is arbitrary and distorted. Johnson’s perspective has served him and a great many others very well because, page counts aside, the detail provided in each section is quite remarkable given the compact overall format.  Your mileage may vary, of course, but I think  you’ll find Johnson’s classic viewpoint useful and interesting even if your interests aren’t exactly aligned.

This is a fascinating little book, packed full of information and insights. It you haven’t looked at a copy in a while you don’t know what you are missing.

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f28420adc2e634602079d783a8f823480a43eb91Lucia Albino Gilbert and John C. Gilbert, Women Winemakers: Personal Odysseys (Luminare Press, 2020).

The professors Gilbert view wine from a different perspective that I find particularly interesting. Wine is made by people — men and women — but not in equal proportions.  Men have traditionally dominated the winemaking field and women have only risen significantly in the last generation or so. 

The Gilberts want to understand this phenomenon and their book provides observations based on interviews with selected  leading women winemakers in California; Champagne, France; Piemonte, Italy; Rioja, Priorat, and Penèdes, Spain; the Douro Valley, Portugal; and Hawke’s Bay, New Zealand.

The authors identify several waves of women winemakers in California, which allows them to see how conditions have changed over time. My reading here is that certain important individuals and networks were key to opening doors for others.

The interviews make good reading on their own as they give a sense of the barriers and opportunities that each woman confronted. The Gilberts synthesize their fieldwork results to establish four typical pathways that women have followed: family, science/agronomy, enology, and sensory analysis.  Chapter 9 summarizes advice for women who seek a career in wine.

There are lots of stories here, but the big story is simply to make these women winemakers visible — to shine a light on them — and so to inspire other women to follow in their footsteps (or maybe forge their own paths).

This is a scholarly volume, but not a stuffy or boring one. The Gilberts are careful to allow their subjects to speak for themselves as much as possible. These are important voices and the Gilberts do a great service by giving them this opportunity to be heard.

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Anderson, K. and S. Nelgen (2020), Which Winegrape Varieties are Grown Where? A Global Empirical Picture (Revised Edition), Adelaide: University of Adelaide Press. Freely available as an e-book at www.adelaide.edu.au/press/titles/winegrapes, and in Excel format at https://economics.adelaide.edu.au/wine-economics/databases.

which winegrapes

Kym Anderson and Signe Nelgen have released a new edition of their survey of global winegrape production and it is available as a free download (see link above) or for purchase in paperback from Amazon.com.  It examines  global wine through a third lens — that of the grape vine itself — and it sees a world that is changing very rapidly.

One paradox found here is this. When I survey the retail wine wall I get the sense of a greater variety of wines made from a greater variety of grape varieties. More of these wines make it to the broader market today than in the past or at least seem to be more visible.

But, as data shows here, this casual empiricism disguises the fact that grape plantings are actually becoming less diverse. More of the world’s vineyards are planted to a handful of grape varieties.

In Spain, for example, Tempranillo is the only red variety that has increased in vineyard area (and it has done so massively). All the others have decreased. As Spain has reduced its overall vineyard acreage it has also shifted to its most marketable red grape variety. Fascinating.

One of the most important new features of this book is found in Section VII, where climate data for each of 800+ winegrowing regions is provided thanks to studies by Prof. Gregory Jones. Climate change data are combined with winegrape planting statistics to estimate to what extent winegrowers are mitigating climate dynamics through their grape variety choices.

This is a big, dense book that invites casual browsing of its many clear charts and diagrams but really rewards close study of the detailed tables. The price is right for the ebook version.  You should check it out.

Book Excerpt: On the China Wine Trail

chinaI thought you might enjoy using your imagination to travel to China along with Cynthia Howson and Pierre Ly via this excerpt from their new book Adventures on the China Wine Trail: How Farmers, Local Governments, Teachers, and Entrepreneurs Are Rocking the Wine World, which won the 2020 Gourmand Awards gold medal for wine tourism books.

Many thanks to Cynthia and Pierre and to Rowman & Littlefield for giving permission for publication here. This selection is from Chapter 2: Sea, Sand, and Shandong. Enjoy!

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It was serendipitous that we ended up on the beautiful coast of Shandong, with its sandy beaches and romantic restaurants, on Qixi, the Chinese version of Valentine’s Day. We were travelling with our colleague, Jeff, an adventurous traveler with enough Chinese to get into trouble. This is even more so since Jeff’s then wife had stayed in Seattle and no matter how much he emphasized he was married, he seemed to get quite a bit of attention. That he found himself declining offers at 4:00 a.m. in the Qixi-themed night club was to be expected. The unsolicited calls to his hotel room from would-be escorts took him by surprise. We probably also got such calls, but since we didn’t understand them, we assumed a wrong number. For us, the city of Yantai was brimming with kitsch and romance. Our hotel bathroom was adorned with stickers with cute animals and hearts. And on the bed, we found towels folded into heart-shaped kissing swans.

We made the mistake of overfilling our schedule and requesting a meeting with renowned Chinese wine journalist, Jim Sun, just as he returned from a business trip on the erstwhile romantic evening. Of course, he and his wife were incredibly gracious as he led us through a tasting to showcase some of China’s best wine regions. It was only later that we considered the couple may have better things to do than a 7:00 p.m. meeting with economists.

His shop was in the perfect romantic space, near Yantai’s “World Wine Walk.” The pedestrian path connects the road to the crowded sunny beach and it’s lined with facades of shops named after world wine regions. A young man with a burgundy-colored shirt and black pants held his fiancée, whose red dress was a great match for the red circle shaped sign of a shop referencing wines of . . . Niagara. We never figured out why the gate that led to it was behind a giant yellow rubber duck, but this, too, was photo-worthy. In any case, Yantai is a must-see capital for a wine tourism enthusiast in China.

winewalk

Yantai’s World Wine Walk: a great place for wedding pictures

What makes the city so special? It turns out that this is where Chinese wine began, longer ago than you might think, in the late nineteenth century. When we prepared for our first China trip, we jumped straight to the index of our brand-new 2013 Lonely Planet China, and searched for the word “wine.” Of course, this was no California or France travel guide. But we were pleased to find at least one mystery wine destination: the Changyu Wine Culture Museum, in Yantai. Back when we began our China wine adventure, that was the only place the Lonely Planet sent English-speaking tourists looking for wine in the country.

Changyu was the first winery, and to commemorate this, in 1992, they built the Changyu Wine Culture Museum. Only a short walk from the waterfront, conveniently located near other top sights, bars and restaurants, the museum attracts large groups of tourists who are happy to take the guided tour and hear the story. Since then, a booming wine industry has developed in the province, including many wineries designed as attention-grabbing tourist attractions.

When Changyu opened the first modern winery in China, founder Zhang Bishi had help from an Austrian Vice Consul and winemaker, Baron Max von Babo.i It is one of the first names you learn on the tour, but it could have been someone else. When the company was founded in the early 1890s, the first foreign consultant, an Englishman who had signed a twenty-year contract, fell ill before he was due to arrive and died of a toothache gone wrong. The Dutch winemaker that followed him turned out not to be qualified. Von Babo got the job and the rest is history.ii “Babo” might ring a bell for dedicated Austrian wine enthusiasts. It is another name for KMW, the standard measurement of grape ripeness still used today to classify Austrian wines. KMW was invented by Max’s father, August Wilhelm Freiherr von Babo, an important figure of Austrian viticulture and enology.

The place was designed to promote Changyu’s brand, of course, which is well known thanks to its overwhelming market share and supermarket shelf space. But there is a clear effort to teach visitors about wine and viticulture, with details on each aspect of production. Armed with knowledge from the museum, tourists can head out of the city toward Chateau Changyu Castel, a joint venture with the Castel wine group from Bordeaux. It’s close to a popular water park and the new construction we saw in 2013 gave a sense of ever-expanding options. There is a museum component here too, but this one is a ginormous working winery. Unlike our Beijing Changyu trip, there were large buses of tour groups, exiting en masse, walking through the vineyard (“Don’t Pick!” one sign said). They took the guided tour of the winery, observing the large stainless-steel tanks and taking pictures of the long rows of oak barrels, or in front of the display riddling station for sparkling wine bottles. On the way, our taxi driver told us he didn’t drink wine, but he recited with pride how the winery got started in 1892 by Zhang Bishi. We invited him along, and he enthusiastically took even more pictures than we did.

The winery tour included a tasting in the bar with views over the vineyard, as well as a percussion set, two foosball tables, and coin-operated barrel dispensers. Families seemed to have fun with the tasting, studiously following their guide’s instructions. But tastings weren’t presented as the highlight of the tours. At the museum, the tasting was in the underground cellar, with pre-filled glasses lined up and covered with plastic wrap, leaving the white wine samples awkwardly warm. Unlike in Napa, no one came here hoping to get tipsy. As one Chinese expert told us when we asked about these tours, if the tasting is deemphasized, it’s probably not the best part. We knew that Changyu wine had won international awards, so why did they serve underwhelming wines to visitors? These museums did a good job promoting wine culture in beautiful spaces, but the wines themselves seemed to be extras on the set rather than main characters. Three years later though, on a return visit to the museum, the wines on the tour were good. Did this reflect a renewed focus on wine quality, or did we show up on a good day? Time will tell.

Changyu and wine street are just the beginning of a wine tourist route along the coast. We drove north to see where thousands of families plan their beach vacations, just a short hop from Beijing, Shanghai, and Seoul. Our hotel lobby was filled with an all-ages crowd, geared up with matching hats. The group was among two million visitors hoping to see a magical mirage at the Penglai Pavilion, one of the four great towers of China. Add glorious beaches, an ocean aquarium with dolphin shows, fresh seafood and nightlife opportunities, and you can see why investors see wine tourism dollar signs in the making.

Adventures on the China Wine Trail: How Farmers, Local Governments, Teachers, and Entrepreneurs Are Rocking the Wine World by Cynthia Howson and Pierre Ly. Rowman & Littlefield, 2020.  Reprinted by permission of Rowman & Littlefield Publishers.

Notes:

i His employment contract, in English, is an auction item at Christie’s. See Christie’s, “Wine in China,” Christie’s, January 16, 2014, https://www.christies.com.
ii Michael R. Godley, The Mandarin-Capitalists from Nanyang: Overseas Chinese Enterprise in the Modernisation of China 1893-1911 (Cambridge: Cambridge University Press, 2002); Jonathan Ray, “Wine: Is China the New Chile When It Comes to Wine?,” Telegraph, January 18, 2008, https://www.telegraph.co.uk/.

Flashback to the Future? Wine & the Demolition Man Syndrome

nz2020Sue and I recently uncorked (or unscrewed, actually) our first wine of the 2020 vintage: a Marlborough Sauvignon Blanc by Cathedral Cove.  2020 already? Wow. That’s quick turnaround. It didn’t take very long to go from vineyard to cellar to container ship to importer to distributor to retailer to our mid-August table. (It was great, by the way, paired with a flavorful Greek salad with veggies from our garden.)

There are lots of wines that generate quick cash flow for producers while providing ready refreshment for consumers. Beaujolais Nouveau (which I have called the “Black Friday” wine) fits into this category along with a Portuguese wine that a happy grower once assured me was the greatest wine in the world (at least from his perspective): Vinho Verde.

Sue and I learned to appreciate the relaxed charm of young wines years ago during a visit to Vienna.  We spent an afternoon in Grinzing where we looked for Heurigen wine taverns with pine boughs over the doors, a signal that fresh wine could be found within.

Our first 2020 wine of 2020 provokes this flashback column from 2016, which speculated about shifting patterns of retail sales, the possibility of grape-free wine, and the rise and rise of New Zealand Sauvignon Blanc. Has the pandemic accelerated some of the trends discussed below? Maybe looking back can help us better recognize what might be ahead.

One thing is sure: in the 4 years since this was written New Zealand Sauvignon Blanc sales have boomed in the U.S. market and the wine’s premium price has endured. Slowly but surely, Kiwi Sauvignon Blanc’s market share has risen higher and higher.  How far can it go?  Here’s that flashback column from 2016. Enjoy

The Demolition Man Syndrome: A Vision of the Future of Wine in America?

Wine Economist / February 26, 2016

I’ve been catching up on my wine industry reading and one report that grabbed by attention is Rabobank’s May 2016 Industry Note,  “The Premiumization Conundrum”.

The gist of the analysis is that the premiumization trend in the U.S. wine market isn’t simply a case of what Paul Krugman calls “up and down economics” — in this case demand for $10+ wine is up, demand for cheaper wines is down –but rather it needs to be understood in the context of a broader set of wine market changes.

Not Just Up and Down

The Rabobank report examines five important tensions that are part of the premiumization syndrome:

  1. Demand for premium vs. basic wine grapes
  2. Securing long-term premium grape supply vs. managing return on capital
  3. Wholesaler consolidation and retail “chainification” of wine vs. premiumization
  4. Traditional retail vs. DTC vs. NIMBY
  5. Domestic wine vs. imports

As I was reading the Rabobank report I began to wonder how these trends might unfold if continued at their present rates well into the future. In other words I was doing exactly what economists are trained not to do, which is engage in straight line projection. The future is out there somewhere, but it is almost never on a straight line that connects the last few dots on your time-series chart and then continues on out to infinity … and beyond.

But humor me with a little thought experiment. What might the future look like under the admittedly unlikely “straight-line trend projection” circumstances? Take today’s trends as Rabobank reports and fly them straight out to wherever they take you.

Pondering this thought, I unexpectedly found myself channeling a 1993 Sylvester Stallone, Wesley Snipes, and Sandra Bullock film called Demolition ManStallone plays a police officer named John Spartan who was put into suspended animation only to be awakened 36 years into the future in 2032 in order to catch Wesley Snipe’s bad guy character.

All Taco Bell Now

Stallone’s updated Rip Van Winkle encounters a lot that surprises  including, as in the film scene above, the inconvenient truth about retail consolidation run amuck. Invited to dinner and dancing at a Taco Bell, he can’t help but think, Taco Bell? Really?

But it really is, as Bullock’s character explains. Taco Bell was the only chain to survive the franchise wars and now all restaurants are Taco Bells. “No way!” Way!

Rabobank’s report notes a number of important trends that, if taken to a ridiculous Taco Bell kind of extreme, might produce something that Demolition Man would recognize. Here are three that I can’t help pondering.

All MoVin Now

The fictional John Spartan goes shopping for wine in 2032 San Angeles and the first place he sees is a big box MoVin store, bigger than the biggest wine-beer-spirits stores of the past, but recognizably the same concept. He continues on in search for a small, specialist shop, but soon runs across another MoVin. And then another and another and slowly it comes to him that just as all restaurants are Taco Bell, all wine is now retailed by MoVin.1353026500232-577831165

How did this happen? Well, as the Rabobank report notes, all of the growth in off-premises retail sales of wine in the U.S. in the last couple of  years has come through retail chains, not independent shops and stores. Take away BevMo, Total Wine, Costco and other multiple retailers (I assume Kroger fits here, too) and Rabobank’s data show off-premises wine sales would be flat.

Follow that trend to its illogical extreme, with the chains seizing market share each year, add logical pressure to consolidate and — hey, presto! — you have a retail wine monopoly.

How did MoVin win this fictional competition over other chains? Because, in this made-up universe, they drew upon the growing consolidation in distribution channels (another Rabobank finding).

Yes, all wine is sold by MoVin in 2032 because they are a wholly-owned subsidiary of NSEW (North-South-East-West),  the only company to survive the vicious distributor wars of 2021.

All Kiwi White Now

There are lots of different super-premium brands on offer at the big box wine store of the future, but the vast array of colorful labels and fictional names actually disguises a certain sameness. Much of the wine comes from the same few large producers, the ones who were able to able to secure reliable quality grape supplies in the grape wars back before 2022, when the last independent North Coast vineyard was swallowed up.

The imperative to lock up vineyard resources is another of the trends that Rabobank spotlights and it is natural to wonder where it will all end. But that isn’t the only source of concern.affiche2

When John Spartan looks closely at the super-premium white wines that he favors (because they pair so well with his favorite Taco Bell fish tacos), he slowly realizes that they are all made by a few large multinational firms in New Zealand. Just as Taco Bell conquered food, the Kiwis were the victors of the white wine wars.

The one constant of U.S. wine import statistics in recent years has been that New Zealand Sauvignon Blanc imports will grow, often faster than any other import category. I keep waiting for the run to end (and I know Kiwi producers who hold their breath and cross their fingers because they are worried, too). But nothing has stopped or even seriously slowed down New Zealand wine imports so far. And you know where that can lead!

You Want Grapes with that Wine?

What about inexpensive wine? Glad  you asked because that’s where John Spartan had his harshest shock — it made him want to give up wine altogether. It seems that as grape supply became less and less secure and falling prices pushed basic grape producers to other crops like almonds and pistachios, wineries were forced to weaken links to particular regions and then to grapes themselves.

Appellations and geographic designations generally are an expensive luxury if you’re not sure if you can buy the grapes you need to maintain a region-specific brand, so they had to go. And then wine companies gave up specific grape variety designations for the wines for essentially the same reason. All inexpensive wines in 2032 are now proprietary blends. No one knows what might be in the bottle, box or can or where it might have come from. Not many seem to care.

Absent place of origin and clearly-identified grape variety components, inexpensive wines evolved into branded alcoholic beverages and, once consumers accepted that, there wasn’t any reason why they had to be made out of grapes any more. The laws were re-written to allow inexpensive wine-like products to be made and marketed and people lapped them up. Wine for the masses endured, but in an ersatz Taco Bell kind of way.

Or at least that’s where bad economic analysis (and not enough sleep) takes you if you follow recent trends to ridiculous extremes, which I have done here just for fun, but the Rabobank report definitely avoids.

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2020 Editor’s note: Wait! Did the final section anticipate the rise of hard seltzer? I’m not sure. The future? Taco Bell? No Way! That’ll never happen. Don’t worry. Go back to sleep. G’night!

Thanks to New York Times columnist Thomas Friedman, who indirectly inspired this column. He told the story of the “Demolition Man” Taco Bell scene in his best-selling 2000 book about globalization, The Lexus and the Olive Tree.

Book Review: The Wines of South Africa

gi_157779_newsimage_vcsprasset_1603936_157779_a1e0438a-e7e6-4421-b354-a406a5fa9579_0Jim Clarke, The Wines of South Africa (The Classic Wine Library) Infinite Ideas, 2020.

Conventional wisdom holds that books with titles that begin “The Wines of …” are organized around what I call the “Three Ps” of wine: the people and their history, the places (geography, climate, terroir), and the plants (most important grape varieties). Good wine books provide interesting and informative accounts of each “P,” but the best ones find a way to rise above orthodoxy to give readers a taste of what really makes a particular region special.

Jim Clarke’s book on South Africa’s wine industry does just that and it is why I recommend it to you. Clarke is U.S. marketing manager for Wines of South Africa and that puts him in an excellent position to analyze South Africa’s wine sector. It is an important book and I encourage anyone interested in South Africa or global wine to read it, but it is not (and does not try to be) definitive for two reasons. First, Clarke wisely chooses to highlight selected wineries in each region rather than trying to cover them all. Balance is key — breadth can be the enemy of depth in this as in so many things. So you will want to have a recent edition of the Platter’s Guide for maps and comprehensive coverage of working wine cellars.

The pace of change is the second limitation. History is moving at warp speed these days — have you noticed? — and it is impossible for books to keep up, even if like this one they are hot off the presses.  Clarke tells the people story though his account of the twists and turns of South Africa’s wine history, which is necessarily intertwined with the country’s history more generally. One inevitable theme here is the importance of turning points — people and events that caused conditions to suddenly change, with effects that sometimes take years to fully unfold.

Balancing Act

2020 looks to be a year of turning points for South African wine. South Africa’s wine sector has for some time been balancing uncomfortably on an economic knife’s edge.
Some producers who go for high yields are able to coax out profits in most years despite low prices in bulk wine markets. Those who restrict yields and aim for higher quality achieve it — the best of the wines are simply spectacular — but often fail to earn prices high enough to produce profits. For at least part of South African wine, quantity pays better than quality. And many wine growers in both camps fail to earn sustainable returns.

Clarks explains this situation very well and the reader can sense his optimism going into 2020. Maybe this is a turning point moment when the country’s wines will finally achieve the widespread recognition (and higher prices) they need and deserve. I am optimistic about this, too.

But 2020 has turned out not to be that kind of turning point year. Instead it has been a year of disasters — the coronavirus pandemic, the global recession, and South Africa’s harsh national policies that have twice shut down domestic wine sales and once stopped export shipments, too. Wineries on the economic margins, many still recovering from severe drought, have been hard hit. A shake-out seems  likely and some wineries that went into 2020’s recession in weak condition will have trouble coming out the other side.

Follow the Money

The problem remains profitability more than wine quality and the collapse of global tourism flows adds one more woe to the pile. South Africa is a wine tourist dream, as Clarke suggests in a brief chapter on this topic, but it will take some time for wine tourists to return to the Cape Winelands in large numbers.

Who is going to lead South Africa’s wine sector out of the perfect storm it is caught in? As Clarke’s analysis makes clear, there is no shortage of institutions and organizations that aim to lead the industry in one way or another. A lot of people  — including a new group called Save SA Wine — are working very hard to limit the current damage and build a stronger foundation for the future.

I am not an insider, so probably I am wrong, but from my outside perspective I’ve always thought that the key must be Distell, the country’s largest private wine producer. Cooperatives, which are enormously important producers in volume terms, are unlikely to be able to lead the charge to boost prices in export markets, but Distell’s interests and those of the high quality wine sector in general are more closely aligned.

If Distell with its great scale and scope doesn’t do it, I don’t know who can or will. But I keep waiting for Distell to execute a sustained and ambitious strategy and make its big move. So far I’ve been disappointed.

Time Has Come Today

Time moves quickly in a crisis. The unfortunate facts of 2020 do not diminish this book’s relevance. In fact it is even more important now for us to understand South Africa wine’s underlying strengths amid significant challenges. And it is important to understand the stories of people and history that Clarke tells so well. South Africa has experienced turning points before and moved through them, drawing upon deep wells of strength and resilience.

Clarke captures South African wine’s bright promise, which we hope will shine through the current storm clouds. Excellent book. Very readable. Highly recommended.

Wine Economist Guide to Wine, Coronavirus Crisis & K-Shaped Recovery

94528e9a-5845-4871-bef5-3285eca66dd5The Wine Economist has published a steady stream of columns on wine, coronavirus, and recession in recent months. I thought it would be useful to assemble them into a kind of guide so that readers can more easily find analysis on different topics and also see how the crisis has evolved.

Although there was concern about the pandemic early in the year (there were hand sanitizer stations everywhere at the Unified Wine & Grape Symposium in early February, for example), it took a few weeks for the real magnitude of the crisis to become clear.

The first Wine Economist column on the crisis appeared on March 10, 2020 and I remember being worried that my analysis was too dark and my projections too pessimistic. It took just a few weeks for the clouds to clear enough for me to realize that I had been much too optimistic instead!

Since then I have tried to analyze the situation from different angles and report and interpret economic news that might otherwise be overlooked within the wine industry.

Brought to You by the Letter K

A column in early April examined prospects for economic recovery. What shape would the recession take. V — a short, sharp shock and quick recover? Or W — double dip? U shapes are typical, but these aren’t typical times. The greatest fear was an L-shape, the macroeconomic equivalent of “I’ve fallen and I can’t get up.” Each shape presents different problems for the wine industry, so there is much at stake in this alphabet soup.

Recent articles in the Washington Post, Wall Street Journal and Financial Times suggest  that another shape will affect at least some business sectors: the K-shaped recession.  The initial sharp economic decline isn’t followed either a rising tide that raises all boats or an ebb tide that leaves them stranded on the beach . Both rise and fall take place in the K-scenario, just in different parts of the economy and in different ways.

kIt is easy to see the K-shaped scenario in recent business reports. Some parts of the economy have recovered very quickly. The S&P 500 stock market index, for example, soared to new highs.  But large scale corporate bankruptcies are soaring, too. Winners are winning big time and losers are drowning in a sea of red ink. That’s how a K-shape recession works. In fact the bull market rally is really K-shaped — look closely and you’ll find both highs and lows.

Some retailers like Walmart have reported higher revenues and earnings — they are part of the K’s upward stroke. But other important sectors such as travel and hospitality slope down. I know of one integrated hospitality company that is experiencing both parts of the K. Their city-based conference and convention operations are suffering, but their rural properties are doing well as families flee to the countryside.

K Sera Sera?

The K shows up in income distribution, too, as higher incomes are cushioned by investment returns while many lower income workers are more vulnerable to joblessness and lower pay. The current Congressional stalemate regarding supplemental unemployment benefits promises to exacerbate this divide.

I think you can see how the K effect applies to the wine industry. There has been a stark division between booming off-premise sales and a bust in on-premise accounts. It makes a big difference which market segment you are swimming in and, of course, many have feet in both ponds.

And while there is evidence of trading up — the Nielsen figures show that off-premise sales growth is high in the $20+ price segments — the impact of falling incomes and rising unemployment among some wine drinkers is impossible to ignore. Sources suggest that buyers for spot grape and bulk wine are concentrating on the value end of the market and that prices reflect this, with some coastal lots selling at California appellation prices.

One of the many important questions this analysis raises is how does the K-recovery (which is only a recovery for some sectors) resolve itself? What is the bottom line going to be? I am not yet ready to hazard a guess. Please use the comments section below for your thoughts and predictions.

A Guide to Wine Economist columns

Here are links to Wine Economist columns on wine, coronavirus, and recession. The most recent columns appear first. I hope you find the analysis helpful as you navigate these turbulent waters.

Book Review: The Goode Guide to Wine

9780520342460Jamie Goode, The Goode Guide to Wine: a manifesto of sorts. University of California Press, 2020.

The trouble with barbecue, at least here in the United States, is that everyone has their own particular idea of what it is and should be. Regional traditions and practices about what to cook (beef, pork, lamb) and how to cook it  and even how to cut (or chop) it have strong proponents. I suspect that duels have been fought (or fistfights, at least) over what is or isn’t barbecue.

Confronted with a fine example of Texas barbecue, for example, the best that someone from North Carolina might offer is the rather weak complement, “it’s good … but it ain’t  barbecue.”

I think this problem applies anywhere people have strong opinions and so it is a wine book problem, too. “It’s good, I guess … ” someone might say or write about a new volume on French wine, “… but it’s not my idea of a book about French wine.” The author’s right to have a different idea, which might in fact be the whole point, doesn’t always get the respect it deserves.

Jamie Goode’s new book is especially likely to suffer from this problem, so I encourage you to approach it with an open mind. Goode is one of the most fascinating characters in the wine business, which is quite full of characters generally. A scientist and former science editor, he began writing about wine on the web very early in the game and has for some time supported himself though writing and speaking about wine.

Goode brings that questioning scientific mind to his work as well as humor, imagination, and a lot of energy. I tell you this from personal experience (our paths have crossed in Cape Town, Napa, Porto, and British Columbia) that spending an evening talking and drinking wine with Jamie Goode is as exciting as it is exhausting. He’s a treasure.

Goode’s long list of books define what you might think of as Goode’s barbecue. They are tightly organized and draw heavily on his scientific background. I am a fan of these books because I can always rely upon Goode to take a technical question, explain it very clearly to me, weight the evidence, and draw a conclusion.

Goode By the Numbers

The Goode Guide to Wine is good, someone familiar with Goode’s previous books might say, but it ain”t Goode’s barbecue. Not so tightly organized and much more personal, it is a peek into the mind of this fascinating fellow as he travels the wine world, seeking out questions, weighing evidence, making up his mind. Since the mind is constantly churning around, the book is, too. Could make you dizzy. Takes a little getting used to.

413s1trpml._sx383_bo1204203200_One way to see this is to compare the basic structure of the Goode Guide with one of Jamie Goode’s previous works, I Taste Red: The Science of Tasting WineI Taste Red divides a little over 200 pages into 10 chapters. The Goode Guide is a little shorter in length, but has 56 chapters. So you can see that each chapter is much smaller, many just a couple of pages.

I read one review that especially objected to this, saying that it looked like a bulked-up Twitter feed. I don’t see it that way. Goode’s style here reminds me a little of one of my favorite books, Trout Fishing in America by Richard Brautigan. The content is completely different, of course, although Brautigan’s book is also a manifesto of sorts, but the short, punchy chapters drive the reader forward in both cases.

Like a conversation with the author, Goode’s ideas pile up as the discussion moves around and circles back. It’s left to the reader to sort things out sometimes, which is a responsibility I am willing to accept.

Boring Writers Beware

This is not guide to buying wine but a discussion of how to think about it. Chapters range from #1: The Heart of Authenticity to #56: Why It Matters. Good tells us that the first half of the book is aimed more at wine drinkers and the second half for the trade.  Each is a manifesto, of sorts, I suppose, but Goode undermines dogmatic notions. It’s OK to disagree with me, Goode says repeatedly, but first think about this … and this … .

Everyone who is a wine writer or works with them needs to read chapter 53, “How to succeed at wine writing by writing boring articles.” I warn you: once you’ve read insightful Goode’s account (including the insider bits) you’ll never be able to read wine articles quite the same way again.

The Goode Guide to Wine ain’t barbecue, but it’s really good. Highly recommended.

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New Yorker writer Calvin Trillin is my authority on barbecue culture. Trillin seems to like all sorts of things that are called barbecue, but the real thing for him is found at Arthur Bryant’s in Kansas City, Missouri.