Wine Wars: Curses, Miracles, and Revenge

Wine Wars 2011: the first books arrive.

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

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

Curse of the Blue Nun

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

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

Miracle of Two Buck Chuck

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

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

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

Revenge of the Terroirists

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

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

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

A Trip to Napa Valley

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

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

The China Syndrome

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

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

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

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

Back to the Future of Armenian Wine

The mission of Boston-based Storica Armenian Wines is to introduce U.S. consumers to the pleasures of Armenian wine and they seem to be off to a good start.

Just last week, for example, Wine Bible author Karen MacNeil‘s Instagram #TasteWithKaren webinar featured Vahe Keushguerian, founder of Keush wines, for a tasting of three of his Armenian traditional method sparkling wines. One of them, the Keush Origins, was our Open That Bottle Night 2021 wine. A delightful wine from an unexpected source, made from indigenous grapes that we’d never before experienced. A great introduction to Armenian wine.

Armenia’s Deep Roots

We are only now getting to know Armenian wine a little but, but already I can see that this is a topic full of fascinating puzzles and paradoxes. Wine in Armenia is both very old and very new.  Landlocked Armenia’s latitude is a bit too low, but its high elevation compensates and creates a sort of grape vine Eden. It is impossible to prove, of course, but Armenia just might be the place where Vine Zero was born, the ultimate source of the vitis vinifera grapes that fill most modern wine bottles today. The oldest known evidence of a working winery was found here.

Armenia’s neighbor Georgia shares some of this history and sometimes calls itself “the cradle of wine” (Armenians like to say they are the “birthplace of wine”) and I rather naively assumed that, because we have visited Georgia and tasted many of their wines, that this might give me a head start in understanding Armenia and its wines. But that’s not how it worked out at all.

No Escaping It

Wine is inescapable in Georgia. It is integral to the national identity. Home-production is so important that it has taken a while for commercially produced wine, most of it aimed for export markets in the former Soviet state markets, to attract a critical mass of local consumers.  Georgia is now investing to develop new markets in China, Europe, and North America in order to reduce their dependence on former-Soviet state exports.

Wine grapes are inescapable in Armenia, as near as I can tell from my research, but wine maybe not so much until quite recently. The World Atlas of Wine estimates at more than 80% of wine grape production goes to make brandy, the national drink.

The wine sector is relatively small, according to this source, with about 50 wineries in 2018, 30 of which only appeared in the last ten years, driven in part by investment from members of the vast international Armenian diaspora and technical “flying winemaker” expertise.

Armenia’s wine past is a mixed bag, as I’ll explain below, but its future is simply irresistible according to winemaking superstar Alberto Antonini. He rates his Zorah project in Armenia (along with his Otrona project in Argentine Patagonia) as the most interesting opportunities in today’s wine world.

Stalin Did It

Why was there so little attention to wine in its birthplace? It is complicated, of course, but one line of reasoning traces the situation back to Stalin’s Soviet Union. The Soviet system was all about exploiting the efficiencies of division of labor to generate maximum output with scarce resources. Thus was Georgia (Stalin’s birthplace and source of his favorite wine) selected to supply wine for the Soviet bloc while Armenia was assigned to specialize brandy production despite the fact that good wine was made in both countries.

That Armenian brandy is excellent and has been compared favorably to Cognac might make Stalin’s policy credible, but the impact on Armenia’s wine sector remains. The production and market structures established in the Soviet era have been slow to change, but change they have and the wines that Storica is introducing to the U.S. market is part of the story.

Terroirist’s Territory

Sue and I enjoyed our OTBN selection of Keush Origins sparkling wine, a traditional method blend of indigenous grape varieties: Voskehat, the most-planted white grape, and Khatoun Kharji, a grape variety that is rare even in Armenia. Sourced from 60-100 year old vines planted at 1800 meters above sea level. An extreme wine with character and finesse. It was an impressive start our Armenia research.

Next in line was Zulal Voskehat 2019, a dry white wine with medium body, good balance, and a very interesting finish, which evolved as we enjoyed the wine with pasta primavera. Vineyards planted on volcanic soils at 1400 meters in the Vayots Dzor region near the Azerbaijani border supplied the grapes for this wine.

Zulal, which means “pure” in Armenian, is a project founded in 2017 by Vahe Keushguerian’s daughter, Aimee Keushguerian. The focus is on indigenous grape varieties and own-rooted vines so old that they pre-date the Soviet era. They are, I suppose, a pure expression of Armenia’s wine past but made using modern cellar practices. It is part of a movement to bring wine back to the center of Armenian culture.

Areni, named for its home village in Vayots Dzor where evidence of the world’s oldest known winery facility was discovered, is said to be Armenia’s signature grape variety and, based on our sample bottle of Zulal Areni 2018, it is a sound choice. Grapes from vines at 1400-1750 meters elevation (wow!) were vinified in stainless steel to produce a fresh, medium-bodied red wine that one tasting note placed somewhere between Pinot Noir and Sangiovese, although I think it is something all its own. We enjoyed the spice and plummy flavors, which went especially well with our dinner of chicken and sautéed spinach with peanut sauce. A keeper for sure.

There is a Zulal Areni Reserve, which is aged for a year in used Caucasian and French oak, that we are setting aside to share with our Armenian-American friends Z and G. It will be a great pleasure, when the pandemic clouds have finally passed, to share with them this is wine as well as a Keush Blanc de Blanc traditional method sparkler. I am confident it will be worth the wait.

Armenian wine has a lot to offer and these first tastes are just the beginning. The Keush and Zulal wines are a fascinating introduction to the Armenian wine renaissance.

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WorldWineRegions.com has created a fascinating website with interactive maps of the world’s wine regions. Here is a link to the map of Areni in Vayots Dzor. Zoom in and out to see both the vineyard areas and the overall terrain.

Climate Change Risks: Reading Between the Wines

Climate change is a threat to the global wine industry — there is not much disagreement about this fact. But what are the specific risks to the wine product chain and what are wine businesses doing about them?

Climate Change Risk: Timely Idea?

This is a complicated question if only because the wine product chain has so many links that are vulnerable to climate change’s direct and indirect effects. One way to begin to answer the question, I proposed in last week’s Wine Economist column, is to focus on the concept of material risk. Climate change is not just an abstract threat to wine, it poses a threat to the material operations of wine firms, which are required, therefore, to disclose and analyze them for the benefit of current and potential investors.

I didn’t come up with this idea myself. As I noted last week, I was inspired by Robert Swaak’s comments at the Porto Climate Change and Wine summit. And I was interested to see climate change and material risk featured in articles in both the Wall Street Journal and the Economist newspaper reporting on Biden administration investment disclosure policy.

And now the Financial Times reports that the European Central Bank is undertaking a climate change stress test to determine the risks that European banks need to take into account in their operations. Climate change risk (and the use of risk disclosure to stimulate action) is an idea that is in the air just now. Let’s see what we can learn from it.

I’ve chosen four quite different firms in different parts of the wine business to discuss here.  This analysis is not especially deep or sophisticated, but hopefully it tells us something about how these businesses think about climate change and perhaps how wine businesses in general see these risks.

Constellation Brands

I start with Constellation Brands because it is a very large publicly-traded company, which therefore has many investors who will look closely at its analysis of risk. Constellation is an important wine and spirits producer, but it derives much of its income from Mexican beer imports and has cannabis interests, too, and each business is subject to a number of significant risks. Constellation identifies four categories of risk: operational risk, strategic risk, financial risk, and “other risks,” which includes risk stemming from the fact that the company has a dual share class structure and is effectively controlled by the Sands family.

Seven pages of the report are devoted to the operational risks (pandemics are risk #1 in the 2020 report) and each risk receives relatively detailed analysis. Climate change is next to last on the list, with discussion focusing on risks to wine supply (through the impact of climate change on vineyard production, for example), and the potential costs of environmental regulatory compliance.

My key take-away form the Constellation annual report is perspective. Climate change is a business risk and environmental advocates would like it to be the top priority. But, in practice, there are a great many risks and, although climate change is taken seriously, it must necessarily compete with other risks for attention and resources.

Treasury Wine Estates

Treasury Wine Estates is a large multinational wine business with substantial assets in Australia and the United States and key markets in China, the UK, the US and around the world. Its Penfolds brand is iconic. It published both a summary Annual Report in 2020 and a supplementary Sustainability Report,  so clearly the importance of environmental issues isrecognized. I focused on the main annual report for this summary.

TWE’s annual report identifies 12 categories of material risk. Changing geopolitical risks is #7 on the list, but I suspect that it is close to the top of the minds of the company’s leaders right now. Political friction between China and TWE’s home country Australia resulted in high Chinese “anti-dumping” tariffs on Aussie wine imports and the collapse of TWE’s #1 export market. Treasury is working on a re-structuring plan and shifting focus, at least for now, to other export markets. That, my friends, is an example of how a seemingly low-probability material risk can strike suddenly and with major impact.

Climate is listed as the #1 material risk, which is described as

The impacts of climate change may lead to adverse effects on business operations and performance.
Restrictions on access to and/or an increase in the cost of water and energy, and the inability of
third-party suppliers to adapt to and mitigate against climate change, could impact on TWE’s ability to effectively source grapes and wine for production.

In addition, governmental actions to reduce the impacts of climate change, for example packaging
waste and emission reduction targets may also impact  TWE’s cost base.

The report lists a number of mitigation strategies.  Treasury’s report suggests that its management recognizes both the direct and indirect impacts of climate on their business and, like Constellation, also anticipate changing regulatory environments as governments address climate change issues. Much more detail is provided in the Sustainability Report.

Tesco

Tesco, the big British supermarket chain, is an incredibly important link in the global wine product chain. Indeed, in my book Wine Wars I list its headquarters on Delamare Road in Cheshunt, Hertfordshire as the center of the wine universe if we think in terms of retail sales. But wine is just one of many products and services that Tesco sells.

The annual report presents what it describes as “a robust approach to risk, ” with a long list of risks, each assessed according to movement (increasing, decreasing risk) and key controls and mitigating factors. Going through the list, I began to worry when I didn’t see a category for climate change. Then I turned to page 20 and discovered that climate is so important to Tesco that it has its own special risk task force.

In addition to general climate risks, Tesco seems to be undertaking specific studies of key product categories and risk areas, which makes sense. Wine is not one of the focus areas in the current report, but it is interesting to look closely at what’s there. Some UK stores and distribution centers, for example, are at risk from flooding due to climate change. And supplies of produce from outside the UK are threatened by climate effects in the countries of origin. South Africa, Egypt, Spain, and Peru are noted as particular concerns.

The supply chains for protein (beef, chicken, etc.) are concerns, too. But there are also demand-side impacts. Tesco expects that climate concerns will shift consumers to plant-based proteins that have less environmental impact than animal-based foods, so building those supply chains and anticipating demand is on the agenda. Very interesting.

Amorim

My final case study is Amorim, the world’s largest producer of cork closures. Amorim is well known for its commitment to sustainability, so I was sure that climate change would factor into its business plan.

Amorim categorizes its business risks as short-term and long-term potential threats. In the short time frame, anything that can affect its two main markets — the world wine industry and the construction sector — will have major impact on the business. The list of things that Amorim must worry about is thus nearly endless.

Long run risks include foreign exchange shifts, competition from alternative closures, and of course the environment.  The cork forests in Southern Europe and Northern Africa that supply Amorin’s raw materials are environmentally significant for their ability to take carbon out of the system and lock it away. As climate concerns intensify, the report suggests, the value of the forests for this purpose will grow.

But, ironically, the cork forests that help mitigate climate change are also threatened by it, which gives the need to address climate issues a particular urgency both for Amorim and, I think, for wine more generally.

More Questions than Answers

The question is what are the climate change risks to the wine industry and how are wine businesses responding. Inevitably this brief study has uncovered more questions than answers, in part because of its inherent limitations. I’ve looked at just four firms, examined their material climate change risks through the lens of annual reports, and of course only had space for fairly superficial summaries here.

Critical readers would have been suspicious of definitive answers or broad conclusions in the context of these limitations. That said, the actual complexity of the problem starts to show through as you read the reports. And the urgency shows through, too.

Given the Biden administration’s new SEC climate change material risk emphasis and the ECB’s climate change stress test program, I think we can expect climate disclosures to be taken even more seriously soon. Much too soon for a victory lap, but good news for wine and the environment nonetheless.

Climate Change and the Wine Business

It is difficult to over-state the potential impact of climate change on the global wine sector. Recently, I was part of a panel on this topic. My task was to get a handle on how climate change is likely to impact the business side of wine. I developed an analytical framework to consider this question based on the concept of material risk. I wasn’t able to develop my ideas fully during the brief webinar, so I will do so in this space over the next two weeks.

Unpacking the Wine Product Chain

How will climate change impact the wine business? This is a hard question because the wine product chain is global and complicated and because climate impacts can be foreseen at all the product chain links.

One approach — and a good one — is therefore to develop a taxonomy of effects.  Start with nurseries and vineyards (an obvious climate impact point) and move to the cellar, where water availability is key, then through logistics — getting necessary inputs into production process and the final goods to market — and then distribution, sales, and final consumption. Climate change is a factor, either directly or indirectly, at each and every stage.

This is already pretty complicated, but we need to consider direct effects, financial effects, and regulatory responses and their costs. Indirect effects and what we might think of as counter-party impacts add more complexity.  No wonder the Porto Climate Chain conference featured speakers on so many elements of wine production, distribution, and sales. You can’t really address climate change and wine without taking a broad, deep perspective.

Many of the Porto participants were justifiably proud of their contribution to addressing climate change, but in my remarks I challenged them to do more. You need to own your product chain, I said, and take responsibility for whole process. If not you, who?

A Material Risk Approach

Stephen Rannekleiv of Rabobank and Robert Swaak of PwC joined me on that Porto panel and each made an important contribution. Rannekleiv, as he often does, focused on concrete steps that his bank,  its clients,. and other groups were taking to address climate change issues. Swaak, who is now CEO of another big Dutch bank, ABN AMRO, made an important point about climate change risk.

Because the climate change impacts discussed above are complex and uncertain, they are properly considered business risks. Businesses confront lots of risks in their operations, some more tangible than others, and they are expected to reveal and analyze them so that investors understand the business implications.

Confession: reading what firms have to say about risk in their annual reports is one of my guilty pleasures (along with reading really really negative wine reviews). Often the risk analysis is hidden in the back pages of annual reports, almost always in fine print. But it is always there because regulators are serious about requiring businesses to reveal to investors the risks that they are taking. You cannot evaluate risks and return if you don’t know the risk.

I like to think of these risk disclosure statements as being like the fine print you are given when you get a new prescription drug. Do you worry about possible side-effects? If so, be careful about reading drug disclosure statements because it can make imagination go all out of control. Lots of bad things can happen, although the probabilities are low enough relative to the benefits to justify a drug’s regulatory approval.

Swaak’s point in Porto was not just that climate change poses risks, it was that these are material risks — risks that can affect the material operations of the firm — which is a more serious category that requires deeper consideration and fuller disclosure. Swaak hoped that that this status would encourage firms to take climate change more seriously because they would be accountable to their investors for this actions or inactions.

As the Wall Street Journal reported yesterday, the Biden administration’s Securities and Exchange Commission is poised to require the firms its regulations cover to make their climate-change disclosures more comprehensive. The era when climate change risks could be over-looked may be coming to and end.

The Risky Business of Wine

Swaak’s Porto insight made me realize that one way to assess the likely effects of climate change would be to view them through the lens of material risk. Analysis of the material risk sections of corporate annual reports is one way to learn what climate change risks businesses see ahead of them and perhaps also what they are doing to prepare for them. At the very least it is a way to see if climate change is taken seriously.

I admit that this is not deep analysis. The firms might be myopic and not see climate change risks clearly. And there may be differences in the priorities listed in the report and those reflected in their actions. Getting values, priorities, and actions aligned is a universal problem, not limited to just corporations or to climate change.

As an article in the current Economist newspaper suggests, disclosure won’t by itself solve climate problems, but the requirement is at least an incentive to move away from climate-damaging practices and investments. With this in mind,  I made a quick study of four wine sector firms which I had hoped to discuss in that webinar. The four are

(1) Constellation Brands, a very large beverage alcohol company and at one time the world’s largest wine maker.

(2) Treasury Wine Estates, a firm with global interests and product chains.

(3) Tesco, the largest wine retailer and so a key product chain link.

(4) Amorim, the largest cork closure producer, known for its sustainability commitment.

What did my analysis reveal? Come back next week to find out.

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Videos of the Porto Climate Change conference presentations mentioned above are available. Click on these links for presentations by Mike Veseth, Stephen Rannekleiv, and Robert Swaak.

Memo to CNN: Searching for Italian Wine?

Dear CNN,

Sue and I have been watching the CNN original series “Stanley Tucci: Searching for Italy.” Tucci visits six Italian regions, talks with the people, enjoys the food, and tells some stories. Maybe it is because of the pandemic, but there is something very satisfying about following Tucci on his journey. You might want to check it out.

Tucci starts his Giro d’Italia in Naples and then moves on to Rome, Bologna, Milan, Tuscany, and Sicily. The title suggests that he is “Searching for Italy.” Will he find it? Not if he thinks that Italy is a single thing with a single cuisine, because that Italy has never existed. But if he is willing to accept that Italy is its regions — and I am sure he is — then he’ll be fine and so will we.

Searching for Italian Wine

The chapter on Italy in my book Around the World in Eighty Wines is a Tucci-esque search for Italian wine. My quest to find one wine that can represent all of Italy’s wines comes tantalizingly close to success at one point, but ultimately I realize that Italian wine is impossible. There are only the wines of Italy’s regions. No wonder the Italian wine map is perhaps the most complicated in the world.

So it seems to me that Searching for Italian Wine would make a great series for the same reasons that Tucci’s program is so popular. But what would a program about Italy’s wines be like? Walking though beautiful vineyards is great and makes good video, but you can only do that so often before it gets a bit old. Ditto for visiting cellars, inspecting barrels and tanks, and wondering at the majesty of shiny new pneumatic presses and speedy bottling lines.

Watching wine being made isn’t as interesting as watching food being made for some reason (perhaps because it takes so long) and in any case Tucci’s producers seem to realize that there’s a limit to how many times they can show onions being diced or pasta being rolled and cut.  So instead they show the hustle and bustle of markets — that never gets old to me — and focus on real people, who they are, what they do, and how they define and are defined by the local products and food. That’s a model that works every time, if you don’t lose sight of your goal.

Searching for Italy and Its Wines

This leads me to my main point, which is that Tucci’s Searching for Italy could be the perfect Italian wine show if it just brought wine more fully into the frame (note: I write this before the Tuscany episode has been aired). Wine shows up all the time in Searching for Italy, but it is just something the people drink with the food, never an important element of the story. Wine in Italy is so much more.

The Bologna episode is a case in point. Yes, the Prosciutto, Mortadella, and Parmigiano Reggiano cheese are amazing. We were fortunate to enjoy them almost every day when I taught at the Johns Hopkins School of Advanced International Studies Bologna Center a few years ago. Our apartment was on a little alley called Via Pescherie Vecchie in the heart of the heart of the famous central market area. It is an inescapable element of the city’s life so naturally it was on Tucci’s Bologna itinerary. Here’s a video of a visit to this street to give you a sense of the place.

So what do  you drink with these intensely local products? Well, wine of course, but there is a particular local wine that we think is magical. It is called Pignoletto and it is so local that I doubt you will easily find it anywhere else. As I wrote ten years ago after a return visit to our old neighborhood …

Pignoletto is a dry white wine grown only in the hills outside of Bologna. “Lively, crisp, aromatic” is how Jancis Robinson describes it in her Guide to Wine Grapes. Pignoletto is distinctly Bolognese — grown there, made there and I think that every last drop of it is consumed there, too, since it goes so well with the rich local cuisine (almost as if they evolved together … which I guess they did).  It would be hard to beat the simple meal of salumi, cheese and bread that we had with a bottle of Pignoletto frizzante at Tamburini‘s wine bar in the Bologna central market.

The food and this wine evolved together in Bologna. No wonder they are such a perfect match. And they say something about the importance of place in a footloose world, don’t you think? It would have been easy to include this wine (and some others, too) in the Bologna episode, CNN,  and your viewers would have thanked you for opening this door to Italian wine, food, and culture.

Dear CNN: Who Ya Gonna Call?

So, CNN, you are probably wondering who can help you take Searching for Italy to the next level by adding the magic of wine to the mix? Well, our team here at The Wine Economist stands ready to lend a hand (and pull a few corks) and we have no end of ideas for season 2 in the Veneto, Friuli, Alto Adige, Piemonte, Liguria, Sardinia — and that’s just getting started! Let’s take that Italian map and search for Italy and Italian wine in every corner.

Italy is a mosaic of people, places, wine, food … and wine, too. Let’s work together to tell the story of Italian wine in context, one beautiful region at a time.

Sincerely,

The Wine Economist team

OTBN 2021: Open That Bottle of Armenian Wine

We celebrated Open That Bottle Night (OTBN) 2021 on Saturday with a pandemic-mode Zoom gathering of the usual suspects. We shared stories, honoring the tradition, and felt good about being together even if we could not also share the particular bottles of wine we brought to the party. Next year. Fingers crossed!

Usually the wines we select for OTBN are a backward glance. They remind us of people, places, or events that live in our memories and are released when glasses are poured. This year was different. Sue and I recently received samples of wines from Armenia from Storica Wines, an Armenia wine import company.  We’ve never been to Armenia. Never tasted the wines. OTBN was our excuse to pop the first cork, look ahead not behind, and imagine a future Armenian adventure.

First Taste of Armenian Wine

Wine has a very long history in Armenia just as it does in neighboring Georgia. Armenia calls itself the “birthplace of wine,” while Georgia fancies itself the “cradle of wine.” Georgian wine, as I have written here, is getting lots of attention just now. Perhaps Armenia will be next? That’s a question we will discuss in more depth in a future column. The focus for today is our OTBN discovery.

The particular wine we opened is the Keush Origins Brut traditional method sparkling wine. It is made from native Armenian grape varieties: 60% Voskehat and 40% Khatouni. The grapes come from 60 to 100-year old ungrafted vines grown at over 5000 feet elevation in the Vayots Dzor region. Does that get  your attention. Extreme wine!  Voskehat is Armenia’s most important white grape variety and is used to make many styles of wine. Khatouni seems to be relatively rare, even in Armenia. I couldn’t find a listing in the encyclopedic Wine Grapes volume.

Wine Gets Personal

Wine is about people as much as grapes and that’s true in this case, too. The Keush Origins Brut was one of the Armenian wines highlighted by our friends Dr. Matthew Horkey and Charine Tan in their handy book Uncorking the Caucasus: Wine from Turkey, Armenia, and Georgia,  so it was satisfying to imagine that we were tasting it for the first time with them.

Matt and Charine were impressed with the Keush Origins wine they tasted — it was the first release of this wine. But it is easy to tell that they were also quite taken with its maker, Vahe Keushguerian. who is profiled in the book. Keushguerian, in turn, is obviously taken with Armenia and its wine industry’s potential. They write that

Vahe is committed to reinvigorating Armenia’s wine culture. By using DNA technology to identify grapes found in abandoned monasteries and villages, then cultivating those grapes in his nursery, Vahe and his team have been rediscovering historic wine grapes and bringing them back to life.

We will have more to say about Armenian wine’s past, present, and future in a few weeks when we’ve had time to open the rest of the sample bottles.  In the meantime, what about the Keush Origins OTBN sparkling wine?

Wine’s Superpower

Well, no one comes to the Wine Economist website for wine ratings or tasting notes, but we enjoyed the Keush Origins Brut from Armenia quite a lot. Dry, of course, and mouth-filling. Easy to drink and enjoy and paired very well with cheese, meats, and Sue’s home-made focaccia. Looking forward to opening the other Armenian bottles in our small stash.

Let me close with some reflections on OTBN 2021. Open That Bottle Night 2020 was the last in-person gathering we had before everything closed down last year and distancing and isolation defined social relations. We hesitated a bit about shifting the meet- up online. A Zoom OTBN might honor the tradition, which is important to us, but it wouldn’t be the same. In the end we decided to move ahead and see what would happen.

And I am glad we did. Wine brings people together — that’s one of its superpowers — and it did so again even if we couldn’t actually share the wine, only a screen, some stories, and good company. I was surprised at how much this moved me and am grateful to our friends for making this possible.

Here’s the wine list from OTBN 2021. Thanks to Dottie and John for inventing OTBN and keeping its flame alive. Cheers!

  • Tempus Cellars 2015 Cabernet Sauvignon, Walla Walla
  • DePonte Cellars 2014 Pinot Noir, Oregon
  • Opus One Winery 1989, Napa
  • Chengyu-Moser XV Winery, 2017 Rosé of Cabernet, Ningxia, China
  • Keush Origins Brut, Armenia

Keush Origins Brut is imported by Storica Wines. 

Book Review: The Wines of Georgia

Lisa Granik MW, The Wines of Georgia (The Infinite Ideas Classic Wine Library, 2020).

The wines of Georgia are having a moment, and it is about time. Wine is very old in Georgia, the cradle of wine, but Georgian wines are relatively new on the markets here in the United States, as Georgian producers pivot from dependence on Russia and former Soviet states and work hard to develop markets in the UK, EU, US, and China.

The push into new markets comes at a difficult time because pandemic restrictions have limited travel by charismatic Georgian producers, who represent their wines so well in person, and have shuttered or crippled many restaurants where hand-selling of the wines would be very effective.

We are fortunate, therefore, to have this new book by Lisa Granik MW to spread the word and build momentum for Georgian wine in the post-covid world. Granik tells us that she’s written a reference book, which readers can dip into as needed and read in any order that pleases them. This is partly true. The second half of the book, which presents information about each specific wine region, certainly fills the reference book bill. I am very impressed by the attention to detail and deep scholarship I see here. A wonderful resource for any who wants to take a deep dive into Georgia’s wine industry.

The first half of the book, on the other hand, is a compact primer on Georgia and its wines that I’d recommend to anyone who wants to get a basic understanding of this topic. The chapter on wine culture, with its explanation of the supra wine feast tradition, was fascinating. We attended a couple of supra feasts when we visited Georgia a few years ago for a United Nations conference and Granik’s analysis helped me understand a few fine points I missed at the time.

I was especially interested in the history chapter. Georgians are proud of their long history — dating back thousands of years — but I admit that I am even more interested in the history of the Soviet days and the transition to the market economy. I was not disappointed both with the main narrative and with the detailed footnotes (which are conveniently placed where they belong — at the foot of the page, not the back of the book).

One thing that I asked when we were there, and apparently it is not an uncommon question, is why grape vines are mostly planted on valley floors in Georgia and not on the hillsides as you might expect? The answer goes back to the Soviet days. Quantity and cost were paramount and hillside vineyards did not lend themselves to machine harvest and cultivation.

The chapter on native wine grape varieties is best seen as a reference because there are so many of them that it is hard to remember the names after a while, but I enjoyed reading through the descriptions, focusing especially on the main varieties.. Granik lists the grape varieties alphabetically: white grapes from Akhaltsikhuri Tetri and Avasirkhva to Tsolikouri and red grapes from Adansuri to Usakhelouri.

Granik’s accounts of the places we visited and the people we met in Georgia rang true and went beyond what we learned while we were there. Granik is obviously a fan of Georgia and its wine, but not an uncritical booster. She doesn’t hold back in discussing problems and challenges where she finds them. Her final chapter, where she pulls together challenges and opportunities, is required reading. Highly recommended.

Kiwi Malbec? Signature Wines & the Dutch Disease Effect

Some people like to define wine regions by their signature grape varieties. New Zealand = Sauvignon Blanc. Argentina = Malbec.  You know what I am talking about. So what should you think of a Kiwi Malbec like the one shown here? Read on to find out.

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What do you think of when I say Malbec? Well, there are lots of things that could come to your mind, but I expect that Argentina or Mendoza are at or near the top of your mental list for this term. Malbec is Mendoza’s signature wine grape and it tends to dominate the region’s image.

Signature Wines & the Dutch Disease

This is convenient from a marketing standpoint — it is good to stand for something in the world’s congested wine markets. Here in my home state of Washington, for example, we make great wines from many different wine grapes and we sometimes yearn to have a defining variety like Argentina or our neighbor Oregon with its famous Pinot Noir.

But signature wines have a downside, which I have compared to an economic condition called the Dutch Disease. Sometimes when one sector of an economy becomes particularly successful the result isn’t a tide that lifts all boats, but rather a sort of whirlpool that drags the other sectors down.

Thus Argentine Malbec’s great success makes it more difficult for other interesting wines to get attention. Personally,  I always look for Argentine Cabernet, Semillion, Cab Franc, and Syrah, for example, and there are some wonderful Chardonnays and high-elevation Torrontes, too. But I imagine they are tougher to sell than good old Malbec. The signature wine rises high, but can cast a deep shadow.

New Zealand and the Dutch Disease

Now consider New Zealand wine. What comes to your mind? Chances are that Marlborough Sauvignon Blanc comes first, with Pinot Noir from Central Otago on the list for many. I’m a big fan of these wines, but the Dutch Disease dilemma applies here, too. Other wines and other regions don’t get the attention (Rodney Dangerfield would say they don’t get the respect) they deserve because of the signature wine phenomenon.

So what would you think about a Hawke’s Bay Sauvignon Blanc or a Gimblett Gravels Malbec? Well, I hope your interest would be piqued at the very least. Sue and I visited the Hawke’s Bay area (think Napier on New Zealand’s north island) several years ago, where we were fortunate to meet with Steve Smith MW of Craggy Range. He helped us understand this interesting region and introduced us to the Gimblett Gravels’ rocky dry river bed terrain that makes me think of alluvial fan terroirs such as To Kalon in Napa Valley or The Rocks District of Milton-Freewater in Oregon. Hawke’s Bay is warm enough to make great wines from Bordeaux grape varieties (of which Malbec is one), which are unexpected for those who haven’t fully explored New Zealand’s varied wine scene. The Gimblett Gravels is a special case within that special case. Fascinating.

Now Hear This!

Which brings us to some wines we’ve been for fortunate to be able to sample during this pandemic period. Daniel Brennan is an American who came to New Zealand in 2007 with the intent to focus on Pinot Noir. But somehow the people and terroir of the Hawke’s Bay region captured his attention, which is something Sue and I can appreciate. We stayed with a modest grower/winemaker family in the Esk Valley during our visit and got a deep sense of the people and place.

Brennan makes 11 different wines under the Decible and Giunta labels (including a Pinot Noir from Martinborough). We had the opportunity to sample three of them: the 2019 Decibel Crowethorpe Vineyard Hawke’s Bay Sauvignon Blanc, 2020 Giunta Malbec Nouveau, and 2017 Decibel Gimblett Gravels Malbec.

The Sauvignon Blanc broke through some of the stereotypes about Kiwi Sauv Blanc, with more savory notes than you might expect. The Malbec  Nouveau was just what you want from a young wine like this: fruity, juicy, easy to drink and enjoy. The Gimblett Gravels Malbec featured a line bright acidity that tied together fruit and tannins in ways that evolved in the glass over time. The acidity made it different from most of the Argentina Malbecs we’ve tried.

Brennan makes a number of wines that run counter to the signature wine stereotype, but his passion for Pinot Noir is undiminished. He hosts a popular podcast called Vintage Stories that spreads the word about Kiwi Pinot and the people who craft it.

I’m a Pinot fan, too — and I hope to taste Brennan’s Martinborough wine at some point — but I enjoy these Hawke’s Bay wines because they are distinctive and because they challenge the signature wine stereotype and the Dutch Disease that can go with it. The Gimblett Gravels Malbec forces you to re-think the conventional wisdom about New Zealand … and about Argentina, too, I hope.

Institute of Masters of Wine Webinar: Climate Change & Global Wine Trade

The Institute of Masters of Wine is continuing its webinar series next Wednesday February 17, 2021  with a session on “The Impact of Climate Change on the Global Wine Trade.”

The panel includes

Dr Greg Jones – Chair, Evenstad Center for Wine Education / Wine Studies
Lulie Halstead – CEO Wine Intelligence
Jane Masters MW (moderator) – view MW profile
Mike Veseth – Wine Economist, Professor emeritus of International Political Economy at the University of Puget Sound (Tacoma, Washington)

The session is open to all, but capacity is limited. Follow this link to register. You can track future webinars and view previous ones by following this link.  Hope to see you on the zoom screen!

Anatomy of WineFuture 2021: Think Big

WineFuture 2021, an ambitious virtual wine conference, is just two weeks away and I am excited to be part of the program. The wine industry has embraced the necessary pivot from in-person events to on-line programs, so there are lots of virtual conferences these days. What makes WineFuture 2021 different?

Thinking Big

One distinguishing factor is the expansive vision of the organizers. This program thinks big, with global reach and broad societal focus.  The gist of the program is this: the world is facing not one, not two, but at least four crises and the future — of wine, but not just wine — depends on what we do to address these challenges. The four crises are these.

  • Coronavirus Pandemic Crisis. The global health crisis comes first if only because it is an inescapable fact of daily life today that is likely to cast a long shadow into the future.
  • Global Economic Crisis. The pandemic and policies to address it have pushed the global economy into crisis, which some regions suffer more than others. China seems to be recovering pretty well, for example, while Europe looks likely to slip into another recession in 2021.
  • Inequality and Social Justice Crisis. The health and economy crises have accentuated many serious underlying issues. Inequality and social justice problems are not new, but they, along with the political reactions and social responses to them, have captured our attention.
  • Climate Change Crisis. Climate change is an existential threat and no serious attempt to address other problems can afford to ignore it.

Each of these crises demands our attention. And although there is a natural desire to prioritize the crises and tackle them one at a time, it is important to consider that they are interdependent and can’t really be unstirred, to use a phrase from Tom Stoppard’s “Arcadia.” It is a dauntingly complicated situation. But that’s not a reason to ignore complications and uncertainties. It is a reason to try to unravel the threads to increase understanding so that effective action is possible. That’s what WineFuture 2021 is about.

Beyond Davos Man

Looking through the many sessions and keynote talks it occurs to me that this is the sort of ambitious agenda that I normally associate with the World Economic Forum, that insanely expensive gathering of the global elite that takes place every winter in Davos, Switzerland (except this year, of course, because of the pandemic). What’s different about WineFuture 2021 is that it focuses on the wine industry, of course, and is open to a much broader audience and pressing practical concerns. “Davos Man” has become a derogatory synonym for a certain insulated attitude toward the world and its problems. I don’t see much evidence of Davos Man at WineFuture 2021 … and that’s a good thing.

So what is it about wine that provokes ambitious projects like this? I pondered this question a couple of years ago at the equally ambitious Porto Climate Change Leadership Conference. Maybe it is because wine is an agriculture product, and so rooted in nature in a way that finance capital and some manufactured goods are not? Maybe it is because so many of the largest and most important wine firms are family businesses, which bring a generational perspective to their thinking. Maybe it is wine’s special ability to bring people together — especially thoughtful people like Adrian Bridge, who was instrumental to the Porto project, and Pancho Campo and David Furer, who are the organizing forces for WineFuture 2021.

And then there’s this. WineFuture 2021 will benefit three non-profit initiatives, with funds from the program plus an auction of items donated by speakers going to the charitable causes. The non-profits are SOS Cape Town, which works to address water issues in South Africa, The Porto Protocol, which promotes sustainability in wine, and North Bay Jobs with Justice, which supports initiatives to improve worker conditions in California.

Unfolding Wine’s Future

The four day conference begins with analysis of the challenges, then dives deep into particular areas of concern, focusing on workable solutions, before gazing ahead to the future. Here is how the first day unfolds.

Francis Ford Coppola opens the show — and with his experience in film I know he will do this in dramatic fashion. Coppola is famous for his cinema work, of course, but also for his important efforts in wine and for the values that guide his many and varied efforts. The first formal panel, moderated by the wine industry’s most famous MD — Laura Catena — will address the inescapable topic of the health crisis.

The second panel examines at the economic crisis. I’m speaker and moderator and am delighted to have Rabobank’s Stephen Rannekleiv, South Africa’s Carina Gous, and Professor Eugenio Pomarici of the University of Padova join me for this discussion.  Together we plan to break down the economic impacts and reactions in ways that generate useful insights. We are followed by important panels on reviewing and reversing discrimination, how to deal with the unexpected, and then a keynote by UNESCO Director General Irina Bokova.

The program on days 2, 3, and 4 follow with more important programing by global leaders and wine industry luminaries including keynote talks by Pancho Campo, UNWTO Executive Director Manuel Butler, and OIV Director General Pau Roca. Click here for a list of all the speakers and here for the complete program.

WineFuture 2021 is kind of a big deal. It thinks big, acts big, and seeks to set a high standard for the wine industry as we move  into the future. I am proud of the wine industry for its support of and commitment to big ideas and big initiatives like this one.