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, Hugh 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 bookl 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; Piemonte, Italy; Rioja and Priorat, Spain; the Douro Valley, Portugal; and Hawks 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.

Allegro con Brio: Celebrating 20 Vintages of Eroica Riesling

eroica

“Eroica” is the name given to Beethoven’s third symphony. It is a wonderful work, both elegant and powerful. And it was written to make a statement. First performed in the year 1804, it was meant to rally listeners to oppose the forces of tyranny.

“Eroica” is also the name given to Riesling wines made by a partnership between Dr. Loosen of Germany and Chateau Ste. Michelle of Washington State. “Eroica” is celebrating its 20th vintage this year, which is a good moment to think about how it began, how it developed, and what it means.

A False Start

The idea of a German-Washington Riesling nexus goes back a few years As I wrote in a 2010 Wine Economist column titled “Rielsing’s Rising Tide,” German wine producers played an important role in Washington wine’s modern development.

The Langguth family has been making wine in the Mosel for over 200 years. F.W. Langguth … became interested in international expansion in the early 1980s …  The success of Washington Rieslings from Chateau Ste Michelle and other producers caught Langguth’s attention and soon plans were under way for a major investment.

Langguth and local partners developed Weinbau Vineyard (now part of Sagemoor Farms) on the Wahluke Slope and built a $5 million 35,000 square foot state of the art winery in Mattawa. The winery was the second largest in the state at the time, behind only Chateau Ste Michelle’s big Woodinville facility.

The project lasted only a few years, alas, for reasons that I discuss in the 2010 column. But the winery and vineyards survived and helped accelerate the development of the Washington wine industry. Chateau Ste. Michelle, already an important Riesling producer in the 1980s, is now the largest maker of Riesling wines in the world. And Eroica is the flagship.

The James Brown of Wine

Winemaker Bob Bertheau tells the story that, on only his second day working at Chateau Ste Michelle, he found himself walking vineyards with Ernest Loosen of the famous Mosel winery Dr Loosen. Loosen was looking for a New World partner to help build global momentum for Riesling wines. I think of Loosen as the “James Brown of Wine.”  James Brown is famously “the hardest working man in show business” and Ernst Loosen works just as hard to make the world appreciate Riesling wine.

The partnership between the two companies is embodied in the friendship that developed between the two winemakers, which is easy to see and appreciate when the Riesling world gathers in Seattle every few years for Riesling Rendezvous.

Desert Island Wine

Many people are surprised when I tell them that Riesling is my desert island wine. If had to choose just one kind of wine to drink on a hypothetical remote island, it would be Riesling. Why? Because of its noble quality, of course, but more than that because of the great diversity of styles and expressions that Riesling offers. (People who dismiss it as simply sweet apparently don’t know what they are missing).  To paraphrase Dr. Johnson, a person who is bored with Riesling is bored with life.

It is appropriate, therefore, that Eroica is not just one wine but several.  In the beginning there was Eroica, an off-dry Riesling that raised the bar for Washington Riesling in terms of quality and also price. No one hereabouts was accustomed to paying more than $20 for a bottle of Washington Riesling. The fact that the wine is still around — and still commands a premium price — speaks to its ability to change perceptions.

There was a sweet wine, too. If you’ve ever had a TBA Riesling, you will understand why this was necessary.  Eroica Single Berry Select Riesling raised the bar again.  And eventually Eroica Gold appeared, made in the style of a German Gold Capsule Auslese Riesling. Richer, balanced, with a hint of Noble Rot. Delicious.

Eroica at 20 Vintages

Chateau Ste Michelle invited us to celebrate Eroica’s 20 vintages with them and sent us four Eroica wines that, along with Eroica Gold, make up the current line up. Tasting through the wines was a fascinating experience. The ice wine (Chateau Ste. Michelle & Dr. Loosen 2016 Eroica Riesling Ice Wine 266 cases, $60 SRP) was a thing apart, of course. A delicious example of a sweet wine with texture, aroma, layers of flavor, and balance. Residual sugar is 33% but of course this is beautifully balanced by lively acidity. Grapes harvested at 47 brix. Memorable experience in the same way as a fine Sauterne. I smile just thinking about it.

The other three wines are variations on the classic Eroica theme. We compared the current release (Chateau Ste. Michelle & Dr. Loosen 2018 Eroica Riesling  10,000 cases, $20 SRP) with an Eroica with some bottle age (Chateau Ste. Michelle & Dr. Loosen 2011 Eroica Riesling   60 cases, $35 SRP — Aged Eroica re-release program). Riesling can develop in wonderful ways and even a few years can make a difference. Sue preferred the freshness of the 2018, but I liked the development of the 2011. Both were delicious. Seriously, you should buy some Riesling to put down for a few years if you haven’t done this before.

The final wine (Chateau Ste. Michelle & Dr. Loosen 2016 Eroica XLC Dry Riesling 515 cases, $45 SRP) was fermented in wooden vats, aged on the lees for a year, and fermented dry. It is an idea that Loosen got from a wine his grandfather made years ago. I wasn’t sure what to expect, but was pleased with the elegance and balance. The special treatment added nuance, but didn’t distort the fundamental Eroica characteristics. Interesting. I don’t consider Eroica a sweet wine at all, but this drier version will surprise many Riesling deniers.

The main Eroica release is widely distributed, but the Ice Wine, XLC, and Gold can be harder to find. Here is a link to the CSM Eroica store.

Beethoven’s Eroica is a masterpiece that has been a source of inspiration for more than two centuries. Eroica Riesling was meant to inspire, too, and after 20 vintages we can taste the delicious result. Allegro con brio?  Yes, indeed.

Thanks to Chateau Ste Michelle and Dr Loosen and congratulations to Ernst, Bob, David, Lynda, and everyone else who’s been in the mix for 20 vintages of Eroica Riesling.

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If you haven’t listened to Beethoven’s Eroica Symphony recently, this performance is for you. The first movement is marked “allegro con brio,” of course!

 

Wine, Coronavirus, & the Falling Dollar

xratesWhat is going to happen to the value of the U.S. dollar as the coronavirus crisis unfolds? That was the question that a couple of wine economists (I was one of them) were asked in a zoom meeting back in May.

The dollar’s going to stay strong, we both said. That’s what happens in a crisis. Investors rush to the safety and security of the dollar whenever there is uncertainty and risk. Ironically, the dollar sometimes rises even when the U.S. is the source of the uncertainty, but that’s another story.

Up and Down Economics

Zoom ahead a few weeks to the start of August. The dollar’s value unexpectedly fell dramatically in July as this chart from x-rates.com shows — the largest monthly drop in a decade. The sudden exchange rate change will affect the economy directly and indirectly in many ways — some even believe that it has contributed to the somewhat puzzling situation in the stock market, where values have risen recently despite bad economic and pandemic news. The cheaper dollar makes dollar-denominated  financial assets cheaper for foreign buyers, who look for capital gains when the currency eventual rebounds.

What happened? Why? And why does it matter for the wine industry?

Some people believe that a strong dollar is good and a weak dollar is bad, but the truth is that exchange rate shifts create many positive and negative forces and the net effect depends on the economic environment at the given point in time and  your particular circumstances. The strong dollar of the last few years, for example, made wine imports cheaper in dollar terms and discouraged wine exports — both big negatives for U.S. growers and producers.

But the strong dollar also tended to reduce the cost of equipment and supplies used in U.S. wine production including vineyard and cellar machinery, bottles, capsules, corks, and so on. The strong dollar also indirectly benefited the U.S. companies that import and distribute foreign wine and the on- and off-premise firms that sell it. Wine has a long supply chain and so there are complex exchange rate effects.

The falling dollar tends to reverse all this by increasing the cost of imported wine and wine production supplies and making U.S. exports relatively cheaper abroad.  If you run a vineyard in California, the reduced competition from imports is good news. If you run a distributor that specializes in imports this is more bad news in a year with lots of bad news to digest.

Elementary, My Dear Watson

Although the falling dollar caught me by surprise because I focused on the crisis effect, others who watched exchange rate fundamentals might have seen it coming. That’s because there were indications that the U.S. dollar was over-valued and ripe for a fall at some point.

When we say that a currency is over-valued, we mean that the exchange value is such that the currency purchases more abroad than it does at home. If you travel to Europe, for example, and your euro purchases seem cheap in terms of their dollar equivalent, it is an indication that the dollar is over-valued (and the euro under-valued).

bigmac

The Economist newspaper keeps track of how much currencies are over- or under-valued using their famous Big Mac index. As this graph shows, as of June 2020  the Economist index suggested that U.S. dollar was over-valued compared to all but three (Sweden, Lebanon, and Switzerland) of the currencies that the newspaper tracks.

The British pound was 25% under-valued relative to the dollar. Other wine country currencies: Canadian dollar (-11%), Euro (-16%), Australia (-19%), New Zealand (-23%),  Argentina (-38%), Chile (-39%), and South Africa (-67%). Logically, the U.S. dollar would need to fall quite a lot to restore equilibrium between the currency’s internal and external purchasing power.

In my experience, the Big Mac index is a reasonably good predictor of long-run exchange rate tendencies, but there are many other factors that impact the exchange rate in the short term. In particular, the flight to safety that many of us expected seemed very likely to overwhelm the trade-based adjustments that the Big Max index is based on.

None of the Above

But an article in last weekend’s Financial Times suggests that there is more going on than  adjustment based on “burgernomics.”  Faith in the U.S. as a safe harbor in the storm has weakened, according to the article, because of what is seen as a very poor response to the pandemic. The coronavirus continues to spread, the economy remains very weak, the Federal Reserve is running short of tools, and Congress is gridlocked. And have you heard that there is an election coming up? The eurozone looks like a calmer, safer haven by comparison.

Safer yet, in some eyes, is gold, which isn’t tied to any particular country. Buying gold is a way to vote “none of the above” regarding major currencies. (There’s also Bitcoin, but that’s another story;)

The price of gold hit a record high of $1983 per troy ounce last week. The high price is the result of some investors looking for safety and others making speculative purchases. Demand for gold for use in jewelry and so forth is down because of the pandemic’s impact on sales of the finished products.

Looking ahead, it is difficult to know where the dollar will go next. Financial markets tend to over-shoot — to zoom too high when they are rising and over-state declines.  So it will take a while to know whether July’s dollar decline will persist or if the currency will bounce back quickly.

So pay attention to the risks that exchange rate variability produces. Many wineries will find their exposure to exchange rate risk is small and difficult to identify. But if you have substantial foreign currency costs or revenue streams, you might think about hedging strategies to insure to some degree against unfavorable movements. And everyone ought to consider counter-party risk: are the people who owe you money exposed to increased risk? Will it affect their ability to fulfill their obligations?

 

 

Cooper’s Hawk Winery Leverages Its Unique Business Model

chw

It is time to circle back to check in on one of America’s most innovative wine companies: Cooper’s Hawk Winery & Restaurant.  Cooper’s Hawk has carved out an unexpected market segment (it is too big to be called a niche) and built a loyal following. Can its unique business model continue to thrive in today’s challenging wine business environment?

Cooper’s Hawk by the Numbers

The numbers are impressive. The big winery in Woodridge, Illinois produced 675,000 cases of wine in 2019, according to Wine Business Monthly data, making it the 29th largest wine company in the U.S. — just behind Hess Family Wine Estates and ahead of Wente Vineyards in the U.S league table. Grapes come from the main U.S. vineyard regions and select international sources.

The wines are sold exclusively through a 43-location restaurant/tasting room network that supports what might be the largest wine club in the world with nearly 450,000 members. That takes my breath away.

I first wrote about Cooper’s Hawk Winery & Restaurant in a 2018 Wine Economist column. I was impressed with the vision — bringing wine country (and wine!) to consumers located far away from California vineyards. Customers enter through a “Napa-style” tasting room that includes a gourmet foods market space. The upscale casual restaurant features Cooper’s Hawk wines by the bottle, glass, or flight, with carefully-chosen pairings suggested for each menu item.  Wine club members can pick up their “wine of the month” at the tasting room, giving them an opportunity to sample other wines and to dine in the restaurant.

The thing that excited me about Cooper’s Hawk Winery back in 2018 was the fact that they were successfully engaging consumers in a new way and obviously building interest in wine in general while expanding their own customer base. Bringing a taste of wine country to the local mall or other nearby location might not work for everyone, but it obviously resonates with a lot of folks who can’t get to wine country themselves but still want a bit of that experience.

Epic fail: Sue and I have so far failed in our resolution to experience a Cooper’s Hawk restaurant first hand, but that makes sense in a way when you think about it. We spend a lot of our time in wine country, which is exactly where Cooper’s Hawk is not. So we were excited when we received an invitation to attend a celebratory virtual tasting of Cooper’s Hawk and other wines.

Go Big in Chicago

The occasion for the celebration was the announcement that Cooper’s Hawk’s new flagship location Esquire Chicago received a 2020 Best of Award of Excellence recognition from Wine Spectator magazine.  The 23,000 square foot facility features a 50-foot high wine tower and offers guests 1200 different wine selections. The list includes the Cooper’s Hawk wines, of course, but also hundreds of other wines from wine producers around the globe, which is a first for Cooper’s Hawk.

I suppose you could say that Esquire Chicago and the tall wine tower is at least in part a reaction to some of the key wine market trends of the last few years. Consumers have shown a willingness to broaden their comfort zone of wine styles and, via premiumization, to stretch the budget a bit, too. If the goal of the Cooper’s Hawk organization is to unlock consumer passion for wine by simplifying choice and controlling quality and value, Esquire Chicago aims to provide opportunities to turn the flame up a notch or two. Accordingly, the wines we tasted  in the virtual seminar included two wines from Bordeaux and two Cooper’s Hawk California blends.

Thankfully there was no attempt to create a “Judgement of Paris” result. The purpose wasn’t to probe whether Cooper’s Hawk wines are better than those from Bordeaux, but simply to taste and enjoy different wines of similar general types much as an Esquire Chicago guest might do in a tasting flight.  Perfect. So we sampled a left-bank Bordeaux, Chateau La Tonnelle, alongside a Cabernet-forward Cooper’s Hawk Lux Meritage blend made from Mendocino-sourced grapes. Then we tried Chateau Coutet from the right bank along with a Merlot-forward Cooper’s Hawk Napa/Sonoma blend called Camille Proud, a special creation of CHW’s Master Sommelier Emily Wines made to honor powerful women role models.

The wines were all very good and, because they were still pretty young, even better when we returned to them over the next two days. If these are representative of the kinds of experiences that Emily Wines and Esquire Chicago sommelier Jordyn Sotelo create, then I think their guests are in good hands.

How important is the Wine Spectator restaurant award? Those who attain it are obviously proud, but there are doubters, too. There was even a case of a hoax a few years ago when someone faked an application for the award and fooled the Wine Spectator staff. My opinion is this. There are wine enthusiasts (like you, perhaps) who seek out restaurants that take wine seriously and offer interesting wine choices. A Wine Spectator award is a way for the restaurant to signal consumers of their interest in and commitment to wine.  In a world of asymmetric information (the famous “market for lemons”) such signals can be very valuable.

Navigating Uncharted Waters

Any advantage is worthwhile in the current market environment. Although we did not talk about it during the celebration tasting, the shadow of the conoravirus pandemic is hard to avoid.  This is a difficult time to be in the restaurant business and not the best time for in-person tasting room sales, either. And, of course, Cooper’s Hawk has uniquely combined these two now-problematic areas to define its business model. Sounds like a recipe for trouble, doesn’t it?

But that doesn’t take into account the huge wine club, which seems to be proving itself even more important than before. With almost 450,000 members, the possibilities for engagement though virtual tastings (like ours, but scaled up considerably) are pretty much endless.  And curbside pick up of wine club shipments and to-go restaurant meals, too, where allowed,  ought to cushion somewhat the economic impacts while fostering relationships with sheltered club members.

So triple congratulations to Cooper’s Hawk: for their flagship Esquire Chicago restaurant, for the Wine Spectator recognition, and for their remarkable achievement in keeping so many club members engaged with wine during this difficult period.

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Thanks to Cooper’s Hawk for inviting us to the virtual tasting and to Emily Wines and Jordyn Sotelo for leading the discussion. Fingers crossed that readers everywhere will be able to safely visit CHW and enjoy their hospitality in person before too many more weeks have passed.

Long, Slow Road to Recovery for U.S. Wine

23-sep-2How long will it take for the economy to get back to normal? That’s the question I am asked most often these days, where “back to normal” is code for conditions at the start of 2020, before the coronavirus pandemic and the recession it has produced.

Try to Keep It Real (Compared to What?)

The answer to this question depends on how you look at it. If you are thinking about a world without concern for virus contagion, face masks, and social distancing, the answer might well be “never,” but only time will tell.

Economists often distinguish between “monetary” and “real” economic factors. If you think in monetary terms — stock market valuations, for example — we are already most of the way back. Our modest Wine Economist retirement account is pretty much back to its January 1, 2020 level thanks in part to a few trillion dollars of Federal Reserve and federal government stimulus, which has done a lot to prop up valuations.

But if you are looking at the “real” economy, where output, jobs, and incomes are what count, then the scene is not so serene. A recent report by The Economist Intelligence Unit is titled “A Q3 recovery, what Q3 recovery?” and it warns that the hoped-for big economic bounce in the third quarter of the year is no longer likely. Other business news reports that appeared over the weekend tell a similar story. Here is a link to a summary of the EIU report.

Down the Drain?

The EIU projects that when all the dust settles the U.S. economy will shrink by about 5% in 2020 compared with the previous year. That performance is roughly on par with forecasts for Japan, Canada, and Germany, The other G7 nations will envy a mere 5% decline. The EIU projects that growth rates in the UK and France will be closer to minus 10%, with Italy’s situation a bit worse.

How long will it take for these countries, which are all important wine markets, to return to their pre-pandemic levels of economic activity?  The EIU projects that the U.S. will get there first, but not until Q3 of 2022 — about two years from now. Japan, Canada, and France will be next, hitting the pre-pandemic level in Q4 2022.  Full recovery for the UK will wait until Q4 2023 followed by Italy (Q3 2024) and Japan (Q4 2024). Long road. Slow progress.

In general, the EIU reports, output in the G7 countries in Q3 2020 will be about the same as it was in 2016. Four  years of growth down the drain.

Economic forecasting is an inexact science, or maybe a black art, so you cannot bank on these specific numbers. This is especially true right now given the unknown unknowns about global public health, economic policies, and potential election surprises. But the fact that conservative estimates now suggest a long, slow economic recovery is something we need to digest.

Wine’s Particular Challenges

There are special concerns for the wine industry. An economy isn’t like a train, where all the cars are connected and move at the same speed. Different sectors adjust at different speeds and sometimes move in different directions. While wine is influenced to a great degree by overall economic trends, some particular paths to market are especially influenced by the coronavirus pandemic.

On-trade sales and DtC sales via tasting room visits will likely be slower to recover than retail sales, which we can see now as California has closed down indoor dining and cellar door operations for the second time. And this isn’t the feared “second wave” of infections — that isn’t expected until fall. This is just the echo of the first wave.

It is also important to remember that our 2019 “normal” wasn’t a terrific situation for wine. American wine was challenged by slow growth of demand, supply that was so abundant that vines needed to be pulled, and growing competition from other countries as well as other beverage alcohol categories. Curse you White Claw! U.S. wine producers need to do more than recover volumes, they need to adapt to evolving reality, too.

Simple Pleasures

So it is important and even inspiring to see how active many in the wine industry are in adjusting to what they think the new normal will be. Joana Pais, director of communications and public relations for Sogrape, the important Portuguese producer, told me in an email about the wine tourism situation in Porto and the challenges she and her colleagues face.

Travel to Portugal was booming before the pandemic and wine tourism in Porto and the Douro benefited.  These travel flows collapsed during the spring and are only slowly rebuilding. “It is true that tourism is scary slow,” she writes, “but let’s face it as an opportunity to rethink the purpose of hospitality and work on developing truly incredible experiences, enjoying the simple pleasures of life!”

She’s right about that and more. As I wrote in Around the World in Eighty Wines, wine’s great gift is its ability to give us pleasure. So long was we keep that front and center wine’s future is secure. But the challenges we face on the road to the future are daunting.  The next two to four years will test our collective resilience, but I hope they also excite our imaginations.

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I am already starting to think about what wine market situation will be in January 2021 when the next Unified Wine and Grape Symposium takes place. The conference and trade show will be virtual this time around, reflecting the reality of the pandemic and the uncertainty that must necessarily cloud plans for large gatherings. It will be different, that’s for sure, but there are opportunities, too.