Argentina Wine, Economy, and the Chimera Effect

January 9, 2024 By in Argentina, economic crisis 2 Comments

Sue and I spent a pleasant week last month tasting our way through a group of very interesting wines provided by  Wines of Argentina (see the wine menu below). We scheduled the last of the wines, the Achaval Ferrer Quimera to taste with a meal of smoked brisket and roast vegetables on December 13. We were looking forward to the wine because of our great memories of visiting the winery on our first trip to Mendoza.

We awoke on December 13 to find that the Quimera tasting had taken on a broader meeting. After the markets closed the previous night, Argentina’s new president, Javier Milei, had taken a dramatic first step in his “shock therapy” treatment of the Argentine economy, cutting the official value of the peso in half over-night and doubling, in effect, the cost of any imported goods priced in dollars.

The Chimera Effect

Chimera (or Quimera in Spanish) has more than one meeting. Chimera can be a mythical creature that combines parts of several different animals in unexpected ways  (Americans might think jackalope, I suppose). Or it can refer to a mystical illusion of some sort, which hides a different reality. Mythical? Or mystical? That’s the Chimera effect.

Achaval Ferrer’s Quimera wine was inspired by mythical beasts. It’s a blend of wines from three very different vineyard places. Terroir, we learned on that trip, is very important in Argentina wine, especially the difference between higher- and lower-elevation sites. It is probably just my imagination, but seem to believe that this effect is magnified when older vines are involved. Probably a Chimera!

First, we tasted the barrel samples of the wines from each of the three different vineyards and they were very different indeed! And then we re-created the final blend and finally the finished bottled wine. It was quite an experience to have the Quimera wine come together in our glasses.

Economic Illusion

The economic policies of the new President, the  “anarcho-capitalist” economist Javier Milei, seem to be a combination of the two ideas of chimera, mythical and mystical. The terrible state of the Argentine economy is neither, however. Inflation is out of control, poverty is high and rising, and social tensions are even higher. The fact of the outsider Milei’s election is evidence of the political divisions that overwhelm the nation. Or at least this is how it looks from my long-distance vantage point.

Desperate measures have been employed in the past to try to hold things together. The most obvious symptom of this, to someone familiar with international finance, is the existence of multiple exchange rates. High inflation tends to push down a country’s currency value, which protects exports but increases the cost of imports. To try to avoid the higher import costs, which further fuel domestic inflation, Argentina’s previous government artificially propped up the peso (at high cost), creating a multiple exchange rate system. There was the official rate and then the unofficial rate, which was nearly half the dollar amount,

Exchange Rate Illusions

Then the government resorted to special limited-condition exchange rates to encourage specific activities or to  please particular interest groups. An exchange rate for agricultural goods, to encourage exports, for example. Another exchange rate for foreign tourists is to keep that industry going.  A very special exchange rate, I am told, for Argentines who traveled to see their national team win the FIFA World Cup last year! And finally, of course, a special exchange rate for wine exports, the Malbec peso. What was the peso worth? The answer was all of these exchange rates and none of them. What a chimera!

Multiple exchange rates, which are a Chimera in the mythical beat sense, give the illusion of competitiveness (the other kind of Chimera), but in general, they tend to create inefficiencies and uncertainty. No one who can avoid it is likely to use the peso under these circumstances. So Milei’s “radical” devaluation as noted in the headline above is more conventional than it might seem, lifting the veil and revealing reality.

When Sue and I first visited Argentina a dozen years ago, 100 pesos would buy about 5 U.S. dollars. Now 100 pesos buys about 12 U.S. cents at the official rate, and even less on the unofficial market even after the “shock therapy” evaluation.

Elementary, My Dear Watson

So what should we think about Argentina’s prospects? I am reminded of a comment from the fictional detective Sherlock Holmes. In solving a problem, he said, test each logical theory and eliminate them one by one. When you are done whatever answer you have left, no matter how unlikely, is the solution. Logic and illogic combined — a chimera theory, don’t you think?

It seems to me that Argentina has explored all the possible solutions to its problems and opted, at this point, for the illogical remaining possibility. President Milei combines radical rhetoric and outrageous behavior (he wielded a chainsaw at rallies) with remarkably conventional economic policies (the basic outline of his radical economic plan can be found in the IMF playbook).

It is not clear what will happen now. Milei wone the election, so he was a popular candidate, but his political base as president is questionable and there is strong resistance and opposition. A general strike to protest his programs is planned for later this month.

I am not a fan of President Milei, but perhaps this is the only remaining way forward. Fingers crossed that the short-term pain and disruption lead to longer-term stability and growth.

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Here are the Argentina wines we tasted for this report. We were attracted to these wines because, while they all feature Malbec, Argentina’s signature grape variety, each takes the wine in a different direction. All the wines were excellent, and a common thread of lifted acidity was easy to appreciate, but there was no cookie-cutter effect. Very interesting!
A blend of 50% Cabernet Franc, 45% Malbec, and 5% Casavecchia, a grape variety from Southern Italy that I didn’t know was grown in Argentina.  The balance of Cab Franc and Malbec plus the influence of high-elevation vineyards made this an elegant wine and at an affordable price point.
A blend of 45% Malbec + 18% Cabernet Franc + 18% Merlot + 19% Cabernet Sauvignon from three different vineyards. Grace and power are well balanced here. The Cab Franc and Merlot thoughtfully frame the Malbec and bring out bright notes.
A wine of place. One hundred percent Malbec from the Uco Valley vineyard. Pure Malbec intensity here. A different animal from the other wines.
A blend of 85% Malbec with 10% Cabernet Sauvignon and 5% Merlot. You can sense the BDX sensibility here.

Is 2024 the Year for Next-Level Cava?

January 3, 2024 By in Uncategorized 5 Comments

Did you celebrate the New Year with sparkling wine? If so, what kind did you choose? Sparkling wine is a crowded category, so you have lots of choices. Champagne? Prosecco? Maybe a Cap Classique wine from South Africa?

Cava vs Competition?

The Spanish Cava producers hope that you think of their wines when you make your sparkling wine shopping list, but it is a tough nut to crack with so much competition here in the U.S. market. Cava benefited from the rising sparkling tide in the last several years but has suffered from a “good value” reputation that hasn’t been a particular advantage in the premiumization era.

Cava has a bit of an identity crisis because it doesn’t exactly fit the usual ways we classify wines.  Cava isn’t a region (like Champagne or Prosecco) or a grape variety either.

Like Champagne, Cava has its secondary fermentation in the bottle (the “Classical Method”),  but you must never call it Spanish Champagne. Cava comes from Spain and is made in several regions, not one, so it is not in itself a geographic designation. Cava is made from native Spanish grape varieties, but it can also be made from Chardonnay and Pinot Noir, the grapes of Champagne, or some combination of them all. So it isn’t one of those “signature varietal” wines, either.

In the past, to some degree at least, the identity crisis encouraged Cava producers to compete based on price. Consumers who weren’t sure exactly what Cava was would buy it because it was both good and very good value, with sweet and sour results. The sweet? Rising sales to the tune of almost a quarter billion bottles. The sour? Low prices mean tight margins, especially for winegrowers. The grower squeeze has increased for Cava, as it has elsewhere, as rising costs meet retail price ceilings. Something’s got to give and the hope is that final prices can be pushed up.

Cava Steps Up

How do you raise prices and margins without losing the customers who come for good value? One solution, which producers in many regions are working to implement just now, is to build a quality ladder and encourage buyers to climb to the next level. In Prosecco-land, for example, the ladder starts with Prosecco DOC wines, moves up to  Prosecco Superiore Conegliano Valdobiaddene DOCG, then to the Rive-specific sites, and finally the top-shelf Cartizze wines.

Spanish wine drinkers are familiar with quality levels: Rioja, Rioja Reserva, Rioja Gran Reserva. And so Cava producers have created quality designations of their own. The categories based upon the length of bottle aging: Cava de Guarda (9+ months), Cava de Guarda Superior Reserva (18+ months), Cava de Guarda Superior Gran Reserva (30+ months), and finally Cava de Guarda Superior de Paraje Calificao (36+ months), which is made from grapes from a specific zone or sub-zone. The specific geographic designations seem to be a work in progress as they are not consistently highlighted on the labels we’ve seen, but they are another product differentiation tool to work with.

Style and Substance

Paul Hollywood, the genial judge on that popular UK baking show, is famous for telling nervous contestants that they must show both substance and style and this lesson applies to Cava and other wine regions today. Consumers don’t want to pay more for the same old wine. They might pay more for something better or different. But winemakers and sellers must first get buyers’ attention (the style part) so that they understand what they are getting, and then they must taste the difference (the substance) in the glass. The future of Cava will be shaped, at least in the short run, but how well style and substance come together.

Sue and I have been working our way through samples of next-level Cava. Here is the list with suggested retail prices and some thoughts about the wines we tasted.

Dominio de la Vega Cava Reserva Especial Brut Rose 2020 – $22
Dominio de la Vega Cava Reserva Especial Brut 2018 – $25
Roger Goulart Organic Reserva 2018 – $23
Roger Goulart Gran Reserva Josep Valls 2018 – $25
Vins El Cep Gelida Brut Gran Reserva 2018 – $24
Mestres Visol Brut Nature Gran Reserva 2016 – $41

Next Level Cava Substance

The wines we tasted are very good indeed, especially given their relatively affordable prices. As noted before, some of the wines are made with traditional Spanish grapes, some from Pinot Noir or Chardonnay, which are permitted for Cava, and some from combinations of French and Spanish grapes. All are made using the traditional method, which Cava producers see as a point of differentiation to rival Prosecco.

What did the wines have in common? First, they surprised the people who tasted them with us. More elegant and refined than expected. The Brut, Extra Brut, and Brut Nature wines are surprising by being even drier than the names suggest. More than enough substance to satisfy Mr. Hollywood, I think.

The Mestres Visol Brut Nature Gran Reserva was an extreme Cava experience worth noting. The base wines were held in a combination of stainless steel tanks and chestnut barrels. The second fermentation and bottle aging (under cork stoppers, not the usual metal crown caps) lasted six years! The 2016 wine was disgorged in 2022. Talk about going to extremes to make a point!

The result? A stunning wine. Still fresh, but much more complex than expected, with a long finish. Is this a philosopher’s Cava? It gives a sense of the direction that next level Cava is headed and, even if most of the Cava wines won’t go to this extreme, it is a bright star to follow.

Sue thought the Mestres was the most interesting wine we tasted, but it didn’t really remind her of Cava, which is something to consider. The “People’s Choice” wine was a Rosé of Pinot Noir from Dominio de la Vega. Delicious and delightful. And, alas, impossible to find here in the U.S. market. We tracked down the importer and he said he’d stopped carrying the wines. Disappointing. But that’s what happens sometimes when limited-production wines meet the many headwinds and hurdles of the complicated U.S. market structure.

Cava is changing, but that’s not news. One hundred years ago the wines were sweet and released pretty much as soon as possible. Dry with significant bottle age? Pretty radical in that context, but perhaps on the money today.

Avoiding the MEGO Effect

These next-level Cava wines are more expensive than the Cava wines we usually see in the market, which should send buyers a signal, but how is the differentiation communicated apart from price? If you look at the photo above,  you’ll see seals and designations that tell the informed buyer the story of the wine. A good beginning.

I couldn’t find the designation seal on one of the wines, which puzzled me until I glanced at the top of the bottle. There I spied the round seal sitting elegantly atop the fat cork.  I like the look, but a more obvious display has advantages, too.

Some of our sample wine bottles were cluttered with seals and designations of various types, which risks a MEGO (my eyes glaze over) effect. A clear, simple indicator (think Chianti Classico’s black rooster) would be welcome. I hope these wines can make a bigger dent in the on-trade market for Cava because the story of these next-level Cava wines lends itself to hand-selling.

Redneck Educators Unite!

Sue and I are familiar with this problem from our work last year with the Prosecco Superiore DOCG producers in Northern Italy. Their wines are an authentic step up from many of the best-selling Prosecco DOC products. Their terroir is very special and has been designated a Unesco World Heritage site. These are wines of place (or places, because the DOCG zone is far from homogenous), and you can taste the difference.

Getting consumers to understand the difference and to look for DOCG instead of DOC is a difficult proposition and it is not different for Cava.  But the challenge is worth undertaking. I am reminded of a fellow we met years ago at a Walla Walla farmers market. He was selling organic meat he raised on his farm and he introduced himself as “a redneck educator” because he wasn’t selling organic goat meat, he said, he was educating people about what made his meat different and why they should be willing to pay more for it.

D.O. Cava, Prosecco Superiore, and everyone who aspires to the next level for their products is in the same boat. We are all redneck educators now.

Adventures on the China-Spain Wine Trail

December 27, 2023 By in book reviews, China wine, Spain, wine 2 Comments

The Spanish edition of Cynthia Howson and Pierre Ly’s 2020 book Adventures on the China Wine Trail has just been published by Tolosa Wine Books.

Aventuras en la Ruta del Vino de China

Aventuras en la Ruta del Vino de China is a first-person account of the natural, social, political, and economic forces that shaped the Chinese wine industry and the people who made it all happen. I have always thought of it as the perfect complement to Suzanne Mustacichi’s 2015 best-seller Thirsty Dragon.

Why a Spanish edition of Adventures on the China Wine Trail?  I think part of it was personal, which aligns very well with the way that Howson and Ly tell the Chinese wine story. They met Spanish publisher Lluis Tolosa when they were all in China for the Gourmand International Awards ceremonies. He saw an opening for a book that would help Spanish readers understand the Chinese market and the forces driving wine there. Tolosa tells the story in his prologue to the Spanish edition.

Spanish Wine Goes to China

Spain is the third largest producer of wine in the world and is often the largest exporter by volume. Bulk wine sales to other European countries make up much of the trade. Spain ranks #4 on the China wine import table behind France, Chile, and Italy. (Australia ranked higher in this list before China imposed prohibitive tariffs on Aussie wine.)

Spanish producers were early entrants into China and have been key in the growth of that market.  Torres China, for example, was founded in 1997 and today imports into China and distributes more than 400 wines from 13 countries including, of course, the wine of Familia Torres but also a list of iconic brands from Spain and around the world.

The giant Spanish wine producer Felix Solis was another early entrant to the Chinese market.  It established the Shanghai Félix Solís Winery Corporation in 1998 and, if I can trust my memory, boldly built a facility to accommodate bulk wine imports that was an important factor in the expansion of Spanish wine in China.

Although the Chinese wine market has receded from the peaks of the pre-covid boom years, it remains an important opportunity for Spanish producers in a wine world where opportunities are not thick on the ground.

A Celebration of China and Spain

We wanted to celebrate the China-Spain wine trail with Cynthia and Pierre, but how? Their January 2024 book tour will include stops in many regions of Spain, including Rioja. Sue and I proposed a dinner pairing some Rioja wines we’ve been saving for a good occasion with a Chinese dinner. The pairing makes sense since the Rioja industry was jump-started by French winemakers looking for red wines to replace the Bordeaux wines that were lost to phylloxera. And, of course, China and Bordeaux have a longstanding friendship. Connect the dots and Rioja to China it is!

Pierre and Cynthia prepared some of their favorite dishes from their trips to China and opened a delightful Grace Vineyards traditional method Angelina Brut Reserve 100% Chardonnay sparkling wine from the 2009 vintage. Grace Vineyards is one of China’s top producers and its wines never disappoint.

Sue and I provided the Spanish connection with two Rioja wines: a Marques de Murrieta Finca Ygay Rioja Reserva and Ramon Bilbaos Mirto. We chose the wines to represent two sides of Rioja today. The Finca Ygay is a traditional blend of four grape varieties, with Tempranillo in the lead with 80 percent. The Mirto, on the other hand, is 100 percent Tempranillo.

When Sue and I visited Rioja a few years ago we found that some winemakers were excited to make 100% varietal Rioja wines while others favored a traditional approach. I don’t think we found a consensus in Rioja any more than you might find one in, say, Chianti today about the merits of 100% Sangiovese.

Both Rioja wines paired well with our Chinese meal. Sue likes the rounder Marques de Murrieta best with an eggplant dish and the more structured Ramon Bilbao Mirto with pork belly. The bright acidity of both wines made them easy to pair with the rich Chinese cuisine. It is easy to understand why Spanish wines like these would be popular in China. And Spanish consumers might want to experiment with Chinese-inspired tapas, for example, to match up with their fine wines. China and Spain. Mix and match!

Adventures on the Spain-China wine trail.

Pierre will be in Spain in January to promote the new book and to inform Spanish audiences about the development of the Chinese wine industry. There will be events at bookstores and universities, but the one that I wish I could attend will be at the Marques de Atrio winery.

Why is this particular event so interesting? Because the Spanish winery is owned by ChangYu Pioneer Wine Company, one of China’s most important producers. ChangYu saw the potential for Spanish wine in China and so acquired this historic winery.  The Spain-China wine trail is real and Aventuras en la Ruta del Vino de China is a perfect way to begin to understand it.

Non-Alcoholic Wine and the “Second Glass” Test

December 19, 2023 By in wine, wine markets 1 Comment

Sue and I hadn’t given much thought to non-alcoholic wine (NA wine) for a while but then we read Florence Fabricant’s NY Times article on “8 Non-Acoholic Wines for the Thanksgiving Table” and we knew we had to take another look at this growing category.

The “Second Glass” Test

There are more and more wines in the “No and Low” alcohol category and when we have occasionally tried one or two we have been disappointed. Although we’ve had a sense that the quality is rising along with demand, nothing really passed the “second glass” test.  I might be OK with a glass of one of the NA wines we’d sampled if I needed to avoid alcohol for some reason (designated driver role, for example, or a prescription drug issue), but I probably wouldn’t ask for a second glass.

I’d probably choose an NA beer over an NA wine. NA beers have made big strides. Both imports and domestic products like the ones from Athletic Brewing are high on my list. They taste good, remind me of the kind of beer they are made to represent, and cost about the same as the real thing. I’d be happy to accept a second glass. That’s what we are looking for in NA wine, too.

Journey to NA-ville

Fabricant’s column in hand, we made our way to the local big box beverage superstore and asked for directions to the NA wine section. We were led to the opposite side of the store to a section where all of the NA products (beer, wine, spirits) were on display. There were more NA wines on the shelf than I had imagined, many of them fruit-flavored. Since NA products are regulated as food, not booze, they all had full nutritional information and ingredient lists, so calories, carb counts, and additives were easily identified.

We found one of Fabricant’s recommendations on a lower shelf, the Giesen NA Pinot Grigio from New Zealand, and bought that along with the Giesen NA Sauvignon Blanc. Both wines were mixtures of de-alcoholized wine and a bit of grape juice and some other ingredients. I suspect the juice adds some body that is lost in the de-alcoholization process. We know and respect this producer (and even visited the winery a few years ago), so we were interested in how they would stand up to our tests.

The Giesen wines were better than the NA wines I remembered from past experiments (easy to see why they’ve become so popular), but for me, they didn’t pass the “second glass” test. They tasted fine and cost about the same as the regular Giesen wines, but they didn’t really remind me of Pinot Grigio or Sauvignon Blanc.  But, a step in the right direction.

JØYUS Discovery

Then, by happy coincidence, we received a sample bottle of JØYUS NA sparkling wine. Sue had speculated that sparkling NA wine might be the right direction based, in part, on our experiments with canned wine; she was right. The bubbly wine tasted very good, reminded us of sparkling wine (and not sparkling cider), and at less than $30 per bottle it was priced between Prosecco and Champagne and so in the range you might expect for sparkling wine.

The main ingredients are de-alcoholized wine, water, white grape juice concentrate, natural flavors, and carbon dioxide (to make the bubbles). By the numbers: 30 calories and 6 grams of carbohydrates per 8-ounce serving. (Eight ounces? Yes. Remember that this is a non-alcoholic beverage so larger serving sizes apply.)

Seattle-based  JØYUS makes other varieties of NA wines, both still and sparkling, including a Cabernet Sauvignon. The wine we tasted won best-in-category at the Sunset magazine competition.  Because it is non-alcoholic and regulated as food not booze,  JØYUS is available through Amazon.com!

So 2023 ends on a bright note for NA wine. There are NA wines out there that pass the “second glass” test after all, we just have to find them and hope that the list will grow. New Year’s “cheers” to wine (and NA wine) lovers everywhere.

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Many of my friends insisted that they would never drink an NA wine. But they are only partly correct. A lot of them have been drinking partially non-alcoholic wine for years.

Alcohol levels have been rising along with vineyard temperatures and it is one of the wine industry’s open secrets (along with the use of Mega-Purple to deepen wine colors) that they have been forced to take action to bring high abv down.

A common practice is to take some of the wine, de-alcoholize it, and blend it back in to get to the desired alcohol level. This is better than the dark art of adding “Jesus units” (water) to the fermenting wine to accomplish the same. I guess water is the ultimate NA beverage, isn’t it?

Wine & Chocolate? The Chocolate Moonshine Challenge

December 12, 2023 By in wine 1 Comment

This is a report of our recent experiment pairing various Chocolate Moonshine truffles and fudge (which are not alcoholic despite the name) with different wines. Chocolate Moonshine takes its name from its early days when they made the fudge in the basement of their Pittsburgh-area home. The steaming copper pots so reminded neighbors of copper stills that they called it moonshine fudge. The name stuck along with the nickname of “America’s Favorite Fudge.”

We didn’t set out to explore the world of chocolate and wine pairings, but it has been a delicious journey. Here is the backstory.

We were approached last summer by Rogue Creamery with a proposal to try various wine and cheese (mainly blue cheese) pairings and the exercise proved a spectacular success as reported on The Wine Economist when we mixed and matched the cheeses with some outstanding wines from the El Dorado AVA. The wines made the cheese taste better and more distinctive. The cheeses really brought out some interesting things in the wine. And there were a couple of those magical moments that wine and food pairings so often promise but seldom deliver.

The folks at Chocolate Moonshine proposed a variation on the tasting theme with several of their chocolate treats and some general pairing guidelines. Armed with chocolate, wines, and instructions, Sue and I assembled a group of “usual suspect” research assistants on the Sunday after Thanksgiving and got to work on the Chocolate Moonshine challenge.

Here is a list of the Chocolate Moonshine treats, the general wine recommendations provided by Chocolate Moonshine, and the specific wines we picked for the experiment

  • Farmer’s Market Truffle Collection + Prosecco / Zonin Extra Dy Prosecco DOC
  • Belgian Chocolate Fudge + Pinot Noir /  Kirkland Signature Russian River Valley Pinot Noir 2022
  • Dark Espresso Fudge + Cabernet Sauvignon / Substance CS Columbia Valley Cabernet Sauvignon 2021
  • Belgian Chocolate Walnut Fudge + Tawny Port / Kirkland Signature 10-year-old Tawny Port
  • French Vanilla Fudge + Moscato d’Asti / Terrenostre Spatuss Mosato d’Asti DOCG 2022

Tasting and Results

The tasting was very successful and, combined with the Rogue Creamery experiment a few months ago, has created an enthusiasm for adventures of this sort. What did we learn? The wines and the chocolates were all great on their own, but what about the pairings? I think our gang of usual suspects came away with a lot of specific conclusions and one general observation.

The over-arching theme, as Sue put it, is balance. Wine pairing works when the components together achieve a balance (or in some bases a certain tension) that neither had in the same way on its own. That makes sense, doesn’t it? This is about the balance idea in terms of other successful food pairings such as peanut butter and jelly or Oreo cookies and milk.

Richard, for example, smiled with his first taste of the hazelnut chocolate truffle and Zonin Prosecco. The sparkling wine’s effervescence balanced the rich creaminess of the truffle and brought out its flavor. The chocolate and Prosecco pairing was high on just about everyone’s list, as was the classic combination of Belgian chocolate walnut fudge and Tawny Port. Port likes both chocolate and nuts and they like Port back.

Chloe had a complicated reaction to the chocolate fudge and Pinot Noir pairing. She really liked the fudge and she really liked the Pinot, so having them together made her smile. But did they make magic together? Not so clear. Maybe the balance wasn’t right.

That was the story of the Cabernet Sauvignon and espresso fudge pairing. I think everyone thought that this was a great idea, but the balance wasn’t quite right with this particular combination. Either the Cab needed to be more intense to stand up to the espresso fudge or the fudge needed to be dialed down a notch to better balance the Cabernet (which, it must be said, was nicely balanced on its own, as were all the wines). The idea works, everyone, agreed, but more work is needed to fine-tune the details.

Pairing Power Takeaways

Perhaps the best example of pairing power was the vanilla fudge and Moscato d’Asti. Several people found each of them a bit sweet on their own, but pretty interesting when enjoyed together. Everyone agreed that the Chocolate Moonshine truffles and fudge were delicious and especially creamy, which made them a great partner for the wines we tasted.

We need to explore the topic of wine pairings in more depth. It occurs to me that a tasting like this would be a good way to introduce young people to wine by linking it to something familiar and delicious.

But I think the fact that we tasted in a small group setting made a difference. Water keeps us apart, I like to say, but wine brings us together. And sharing what we think and feel about wine and chocolate was a great way for us to connect with friends and to begin our holiday season.

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Thanks to Chocolate Moonshine for inviting us to take up this challenge!

Wine, Globalization, and the End of History

December 5, 2023 By in globalization, Unified Wine & Grape Symposium, wine, wine history Leave a comment

I have been thinking a lot recently about how much things have changed since the 1990s and what the future might look like in this light. The event that has provoked this unexpected thoughtfulness is the upcoming Unified Wine & Grape Symposium, which will be the 30th edition of what has become North America’s largest wine industry gathering.

A Golden Age?

Looking back at the program for the first Unified, it is clear that the American wine industry was worried about the future. It must have seemed like obstacles and headwinds were all around. Problems in the vineyards. Rising foreign competition. And concerns about both government regulation and uncertain consumer demand. One session was titled “Who Isn’t Drinking Wine and Why.” That’s a question we are asking again today.

Looking back it is easy to appreciate these concerns (because they never really go away). What folks back then didn’t realize, however, is that they were in some ways at the start of a wine industry golden age. Baby boomers were entering peak wine-buying years. The economy was growing, fueling the rising interest in wine. The “French paradox” infused popular culture with the idea that wine (especially red wine) was actually good for you because of its role in the healthful Mediterranean diet. Wine made you feel good, it was good for you, and you could afford to drink it. What could be better?

Things have changed a lot since the 1990s and some of those changes contribute to the challenges that the industry confronts today (and that we will strive to address at Unified 2024).

The Globalization Effect

This makes me think about other ways the world (and the wine world) have changed over these 30 years. Globalization was gaining speed in the 1990s, for example. It was controversial (think NAFTA debates and the Seattle WTO meeting riots), but eventually (when China joined the WTO, for example) it was seen by many as an inevitable tide, an irresistible force.

No one thinks globalization is inevitable anymore. The Global Financial Crisis made investors aware of the risks of international market contagion. The supply-chain disruptions of the COVID era made “nearshoring” an awkward but understandable concept. And now political tensions and uncertainties have driven “friendshoring” trends.

Economic globalization hasn’t collapsed. But it is different. Globalization was a powerful force in wine in the 1990s, too, as patterns of production and consumption around the world shifted and international wine trade volumes rose. They kept rising, too, as the graph above (taken from the most recent OIV global wine report) shows, until about 15 years ago, when the volume of wine exchanged across borders reached a plateau. (Click here for a pdf of the OIV report).

The value of the international wine trade has continued to rise, as the graph below shows, due to the general premiumization trend. The pattern of global wine trade has changed, too, both in terms of shipping patterns (think the sharp Australia-China shifts) and the commodity composition of shipments (packaged goods versus bulk wine, for example).

The End of History Effect

One of the forces that powered economic globalization was the collapse of Communism, which opened up a world of trading and investment opportunities. We called it “The End of History” after the famous book by Francis Fukuyama. History was ideological conflict, Fukuyama argued, which was all over. The liberal order was the only story left to tell.

Wine had its own “End of History” in the 1990s, although it understandably got less attention. The history of wine was defined, more or less, by Old World notions of appellations and terroir. Burgundy was Burgundy and Pinot Noir made anywhere else wasn’t the same. Ditto for Bordeaux and Cabernet Sauvignon.  New World producers might purloin Old World titles to market their wines (remember Gallo Hearty Burgundy?), but no one was fooled.

Jancis Robinson’s 1995 BBC television wine series was an important part of the movement to rewrite wine history. She didn’t organize her tour of world wine as you might expect — Burgundy, Bordeaux, the Rhone, the Loire. She sorted things by grape variety — Pinot Noir, Cabernet, Syrah/Shiraz, Sauvignon Blanc — and featured New World wines and producers alongside familiar Old World names.

Not everyone was convinced that the new history was valid. My favorite scene was where Robinson poured a glass of New World Pinot Noir and asked a famous Burgundy producer what she thought. The winemaker scowled at her glass and proclaimed that Oregon shouldn’t make something like this. They should find their own terroir, she said, invoking that mystical French phrase almost like a curse. Oregon on the same stage as Burgundy? It’s like the end of history. What next?

However, the curse was cast in the opposite direction. Not for the most famous names of Burgundy and Bordeaux, but for producers with less well-known names from less-recognized appellations. The fact that they were defined by their place turned out to be a disadvantage in the global wine world where grape variety was the new lingua franca. ( I am smiling at the irony of this phrase even as I type it.)

The baby boomer consumers that everyone was chasing didn’t grow up understanding appellations, but they rather quickly came to understand grape variety and to define their wine world that way. Thus the wines of emerging global powers New Zealand and Argentina became known for their signature grape varieties more than the particular regions that grew them. No one asked if France or Italy had a signature grape variety (a good thing, because they obviously don’t). But other regions asked the question themselves and decided that the lack of a grape of their own was all that was holding them back.

The End of History in terms of ideological conflict hasn’t exactly worked out. Old divisions have reemerged and new ones have arisen. There is plenty of conflict to go around and history endures.

History has returned to the wine world, too. Wine defined by grape variety was the great leveler and helped open up the world to wine. But today, with the market at a plateau, product differentiation is the name of the game, and claiming terroir is one strategy. AVAs are popping up all over in response.

Golden Age Worries

The golden age of the 1990s didn’t last for wine, but that’s how golden ages work. What’s interesting is that the golden age was already upon us before we realized it (and ended before we knew it, too).

I wonder what’s ahead for wine? My friend Kenneth Boulding used to say that history doesn’t repeat itself, but sometimes it stutters. Something to think about! Another golden age? Hard to see how the stars could align to make that happen. But I don’t think many people saw that golden age on the horizon either.

Fiasco Flashbacks? Rediscovering Chianti Classico

November 28, 2023 By in Italian wine, wine, wine brands, wine history, wine markets Leave a comment

It is called a fiasco.

Fiasco? Yes, I know what you are thinking, but you’re wrong. I’m not talking about what happening in Congress with the debt ceiling. And I am not talking about the bonehead moves your favorite sports team’s coach always seems to make.

A fiasco is a type of bottle. It is bulb-shaped and wrapped in straw that both protects the glass from breakage and keeps the rounded-bottom vessel from tipping over. Back in the day, if you spotted a fiasco you knew instantly what was inside: a tasty medium-bodied Italian wine that probably wouldn’t break the bank when you hit the check-out counter.

Fiasco meant Chianti, which along with Lambrusco and Valpolicella, was the easily recognizable popular face of Italian red wine here in the U.S. The Chianti fiasco was popular with me and my young friends years ago because you got the wine itself and a decorative candle holder (the straw-wrapped bottle) all for the same price. What could be better? The traditional Chianti fiasco still exists, although I don’t see them very often (you can buy empty bottles on eBay if you are into retro decorating).

Sue and I discovered a 1.5-liter fiasco of “red Chianti wine” at Trader Joe’s as this column was being prepared for publication. The fiasco endures!

Chianti Identity Crisis?

I suppose that the move away from the distinctive fiasco was a bit of an identity crisis for Chianti, but it might not have been the only or most important one as Bill Nesto MW and Frances Di Savino explained in their 2016 book  Chianti Classico: The Search for Tuscany’s Noblest Wine.

Nesto and Di Savino argue that Chianti’s historical roots are in a relatively well-defined area that we now associate with Chianti Classico. As Chianti wine became more popular around the world, the Chianti zone expanded and the wine inevitably lost of some its distinctive character. Not all of it represented the original idea of Chianti very well. That’s a more serious identity crisis, especially at a time when there is more and more competition from within Tuscany, within Italy, and around the world.

Product Differentiation

The task for Chianti Classico producers, as it is for quality producers everywhere, is what economists call product differentiation. They need to make consumers aware of the difference between Chianti and Chianti Classico and then, because this is the age of premiumization, to further differentiate the best wines they produce.

The first task – Chianti versus Chianti Classico — is easy from a visual standpoint. Chianti Classico stands out on the shelf with its distinctive black rooster logo. But the wine needs to be distinctive in the glass, too, which has not been as clear in the past when both Chianti and Chianti Classico could be found with quality that varied from excellent down to just fair.

Climbing the Cecchi Chianti Classico Pyramid

The Cecchi family of wine producers invited us to sample their wines and taste the difference and it was an eye-opening experience. The Cecchi winery dates to 1893. Andrea Cecchi, who guided our tasting, is the fourth generation of the family in the business. The family’s home vineyard is Villa Cerna, which they acquired in 1962. The Villa Rosa vineyard was acquired in 2015. Both are complex mosaics of elevation, soil type, and aspect.

We started with their Chianti Classico Storia di Famiglia, which makes up about 60 percent of Chianti Classico production. It is made from 90 percent Sangiovese and 10 percent other grape varieties. Sue took one sip and said “Wow!” This wasn’t like any other Chianti that she tasted recently, she said. Bright, intense, and persistent in the glass. She was immediately taken by the wine’s style and substance. Product differentiation goal #1? Check!

We moved on to Cecchi’s Chianti Classico Riserva wine, Riserva di Famiglia, which is 90 percent Sangiovese and 10 percent Cabernet Sauvignon. Riserva wines are about 35 percent of production. Sue appreciated this wine but didn’t find it as exciting as the first, perhaps because the Riserva might be an attempt to balance the traditional wine identity with the power that the international market sometimes prefers. An excellent wine. And I think Sue’s reaction might have been different if she had tasted it first.

We reached the top of the pyramid with Valore di Famiglia, the Cecchi Chianti Classico Gran Selection wine. Gran Selection accounts for just 5 percent of production. The grapes are 100 percent old-vine Sangiovese from the Villa Rosa vineyard. The wine ages in both oak and concrete. The goal is elegance, limiting intervention so that the identity of the vineyards is not obscured. Goal achieved! A wine of many layers and nuances. Memorable.

Is Chianti Classico a Terroir Wine?

The premise of Chianti Classico is that terroir makes a difference. If it doesn’t, then wines from the larger Chianti appellation (and indeed wines from all over Tuscany) that are made in the same way with the same basic grape varieties should be just as good.

To test the terroir hypothesis we were invited to compare two of the Cecchi Chianti Classico wines that are sourced from two very different vineyard sites.  Primocelle (first hill) Villa Cerna is a particular part of the Villa Cerna vineyard while the Ribaldoni Villa Rosa is from a vineyard of that name with the youngest vines on the estate. The differences showed themselves clearly both on the nose and in the mouth. I enjoyed the violet and iris notes of the Primocolle. Sue was attracted to the elegance and sleek style of the Ribaldoni.

Rediscovering Chianti Classico

Sue says that she enjoyed all the Chianti Classico wines we have tasted recently (and looks forward to a couple of others we have in reserve). Excellent wines are all very different from one another. But she couldn’t forget that first glass of the Cecchi Storia di Famiglia. The purity and clarity stood out. And the surprise punctuated the experience.

I think that we are not the only ones to be rediscovering Chianti Classico. I see that there are seven Chianti Classico wines (including Sue’s favorite from Cecchi) on this year’s Wine Spectator Top 100 list. That’s a strong showing for what is a relatively small region. Congratulations to Cecchi and the other producers for this timely recognition.

Bottle Shocks: Unexpected Wine Bottle Trends

November 21, 2023 By in wine, wine markets 6 Comments

The movement to address climate change challenges is one of those glass half-full or half-empty situations. Bold initiatives are often followed by foot-dragging or back-sliding. Two steps forward then one step back.

Take the electric vehicle (EV) industry, for example. Bold initiatives such as targets to stop sales of gasoline-fueled cars are weakened and deadlines postponed (the situation in the UK). Meanwhile, the wind seems to have gone out of the sails of EV sales in the U.S., leaving auto producers wondering if their bold plans to transform their fleets are premature. Maybe most people who want an EV already have one? Maybe plug-in hybrid vehicles make more sense right now given resource limits, battery technology, and charging infrastructure?

Green Wine Agenda

The wine industry is working to reduce its carbon footprint, too, with attention to the weight of glass bottles particularly noteworthy and easy to understand. Sparkling wine bottles need to be fairly heavy to withstand internal pressure (indeed, the origins of Champagne are linked to innovations in glass bottle technology). But still, wines don’t really need heavy bottles in most situations. So thoughtfully reducing bottle weight has been on the green wine agenda for some time.

Progress is being made both to adopt lighter-weight bottles and to develop systems to recycle and reuse bottles. I have been following an innovative project that aims to re-invent the wine bottle to make it both lighter and more effectively recycled. Verre Vert Bottle, which I understand is at the advanced testing stage, ticks all the boxes with the potential to save energy, lower costs, and reduce carbon emissions.  I am looking forward to seeing how this project develops.

The Heavyweight Champ

But not all the news is good. Sue and I habitually consider wine bottle weight in our work, although we haven’t started keeping detailed records yet. We note when we find an unusually light bottle, for example, and when one seems heavier than we expect given the type of wine.

Recently we’ve run into several heavy bottles weighing about 700-900 grams when Sue puts them on her electronic scale. Not as heavy as our current heavyweight champion, a bottle of wine that our friends Pierre and Cynthia brought back from China that weighs in at 1218 grams (that’s 2.69 pounds!), but pretty heavy nonetheless.

Bottle Shape Differentiation

But that’s not the end of the story. My friend Jonathan Rodwell has brought another wine bottle trend to my attention, Rodwell is a vineyard and winemaking consultant who divides his time between Italy and the UK. He scans supermarket and wine shop shelves wherever he goes to try to keep up with the changing retail scene. Recently he has noted an increase in the use of custom bottles and bottle decorations on the wine wall. I guess a distinctive label is no longer enough to differentiate a wine on crowded retail shelves. The bottle itself needs to be different enough to catch the eye.

Rodwell looked around the noticed that the bottled water shelves had already taken the bottle shape step to the next level. If you look at the water wall you’ll see that major brands have distinctive color and shape bottles. In many cases, you can pretty well guess what water someone is drinking from across the room without seeing the label.

Is this where wine is headed? Product differentiation through specialized bottle shape is not new. Some of the most popular imported wines in U.S. wine history have distinctive bottles. Those rafia-covered Chianti bottles of the past were easy to spot, for example, but I am thinking of brands like Blue Nun (the bottle is bright blue), Black Tower, and Lancers Rose (ceramic bottles), and, of course, Mateus Rose with a bottle shaped like a WWI water flask.

The Bottle’s the Thing …

Mass-market wines like Mateus Rose are not the whole story. Sue and I are no longer surprised when we meet regional wine officials who are convinced that all that’s holding their local industry back is the decision to change the bottle color or shape.

There is no particular reason why the trend toward custom bottles should conflict with the lighter-bottle movement. A blue bottle doesn’t need to weigh more than a brown one. But some of the custom bottles we have seen, with embossed logos or textured surfaces, are heavier than average. And I doubt that they are cheaper than standard glass.

I am not advocating regulation to force everyone in wine to adopt strict glass bottle standards. My point is that wine industry choices are complicated. Even the seemingly simple decision to use lighter glass faces many obstacles. It is important to keep pushing forward — don’t you agree? — if only because the forces pushing back are strong.

In the meantime, I think wine bottles are on a path toward sustainability, even if it doesn’t always take the most direct route.

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Thanks to Jonathan Rodwell for the photo of the water display highlighting the unique bottle designs of each producer.

A Guide to Over-Thinking Thanksgiving Wine

November 14, 2023 By in wine 7 Comments

Sue and I always give some thought to what wines to serve with our Thanksgiving feast and over the years I have reported on our deliberations here on The Wine Economist. Our thinking has evolved over the years. Although we are often “wine first” diners, who choose the wine first and then pick pairings that will complement, we’ve more or less decided that Thanksgiving should be an exception to our rule.

Thanksgiving isn’t really about wine, is it? And it is not actually about food, either, although a lot of attention is pointed in that direction. (I acknowledge that Thanksgiving is about football to some people, but that’s another story.) Thanksgiving is about the relationships that bring us together over the food and wine (and football, I guess). Honoring and deepening those relationships is the thing.

So it is important not to over-think Thanksgiving wine. Wine should make everything better, but it should not be the star. If all you can remember is that glass of wine, the holiday hasn’t fulfilled its potential.

So we pledge not to over-think Thanksgiving wine, but that doesn’t mean we can’t think about it at all. Here is a brief history of our experiments and how our thinking has evolved this year. In each case, we paired wines with a meal that evoked the spirit and flavors of Thanksgiving without cooking  a whole turkey each time.

Test #1 Joseph Phelps Freestone Sonoma Coast Pinot Noir.

We love Joseph Phelps Cabernet Sauvignon wines, but we hadn’t really explored the other varieties in their lineup, so jumped at this opportunity to test out this Sonoma Coast Pinot Noir. It was restrained, elegant, and deftly balanced. And it paired very well with the poultry (seasoned roast chicken) on our test plate. We have often served Pinot Noir at Thanksgiving and this would be a great choice.

But Sue started thinking (danger! danger!). The Pinot Noir was perfect with the bird, and that’s generally the centerpiece of Thanksgiving tables, but what about the side dishes? When you ask people what part of the Thanksgiving meal they could not do without, it usually isn’t the turkey that they name. It is always a traditional (or not-so-traditional) side dish. Maybe, Sue said, we should be focusing on the side dishes in our tests.

Test #2 Joseph Phelps Napa Valley Sauvignon Blanc.

White wine makes lots of sense for pairing with the classic Thanksgiving side dishes, many of which are rich and cry out for something with a little acidity. Sauvignon Blanc is the hottest white varietal wine at the moment and this Napa Valley was an excellent choice.

If you’ve grown accustomed to the stereotypical Marlborough Sauvignon Blanc style, the Joseph Phelps Sauvignon Blanc will come as a bit of a surprise. It is elegant and restrained (the Phelps house style at work?). It didn’t try to take over the show but did exactly the job we were looking for as an ensemble player.

Sauvignon Blanc is a great Thanksgiving choice, but it comes in so many styles that you’ll need to think about which one you choose (without over-thinking it, of course).  That Marlborough style might work depending on the side dishes, but it could be too dominant in some cases. Ditto with a heavily oaked fumé style. Think. But not too much. That’s really hard!

Test #3 Chateau Ste Michelle Indian Wells Yakima Valley Riesling.

Sue and I recently attended a German wine dinner at Ricardo’s Kitchen and Bar in Lacey, Washington and it was such a treat that we’ve been thinking a lot about Riesling wines. Those wines went so well with the robust German cuisine we were served that it makes sense that they would play well with Thanksgiving sides.

We chose the Indian Wells Yakima Valley Riesling from Chateau Ste Michelle. The Chateau is the world’s largest maker of Riesling wines and a lot of the focus is on the entry-level Columbia Valley Riesling, which is one of the great American wine bargains. There is a reason that you see it so often on restaurant by-the-glass lists. It over-delivers on flavor at a price point that works for both buyer and seller.

But there is a lot more to Ste Michelle Riesling than the entry wines, so we were interested in how the Indian Wells wine would work for our Thanksgiving test. The wine was elegant, restrained, and well-balanced. Sue said it would be an excellent role player with the holiday meal. I think it might be fun to try the entire Ste Michelle Riesling range throughout the long Thanksgiving weekend, from the entry-level Columbia Valley wine all the way through the iconic Eroica.

Side notes:  Glad to see winemaker David Rosenthal’s name on the front label because he made so much great white wine at the Chateau before moving to his current work with Partnership Wine Consulting. I am also happy to see that the wine lists the Yakima Valley appellation, which doesn’t always get the respect it deserves for the wonderful wines that are grown there.

Test #4 Zonin Orange-Cran Riviera Spritz.

I did not expect that our experiments would take us in this direction, but once I learned about Zonin’s Orange-Cranberry Riviera Spritz I could not resist. Orange-Cranberry. Those are real Thanksgiving flavors at our house. Sue makes a dynamite orange-cranberry sauce and its tart-sweet brightness really works alongside the savory roast vegetables and, of course, classic green bean casserole. How would those flavors work in a wine?

Sue was very suspicious of the Zonin spritz and accepted her glass reluctantly. I thought it might look and taste something like an Aperol spritz, but I was wrong. The color was bright rosy pink and the aromas and flavors very cranberry and orange, especially on the second day, with a pleasant orange leading the way. Very refreshing!  It would be a great sparkler to serve with Thanksgiving desserts and I think anyone would smile if you gave them a glass of this spritz as they walked through the door because they would know at once that they were going to have fun.

Sue declared herself a fan of the  Zonin Orange-Cranberry Spritz before that first glass was empty. What a surprise!

Thinking About Overthinking

Sue and I have learned a lot through these experiments, which will continue through the Thanksgiving weekend and beyond. Thinking about Thanksgiving wine in terms of the ensemble of flavors on your plate has merit, even if some combinations may work better than others.

Once she started thinking about wine and the side dishes, Sue quickly moved on to other questions. Pairing wines for particular guests? Maybe different wines for leftovers? Because leftovers (like turkey on rye with cream cheese and cranberry sauce) are the highlight for some of us. Next question: what wine to serve with turkey soup?

Wait! Are we starting to over-think this? Nah. That would never happen. So what do you think? Use the comments section to tell us what you are planning for Thanksgiving wine.

Crisis & Change for Washington Wine

November 7, 2023 By in economic crisis, Washington wine, wine, wine markets 2 Comments

Is the Washington State wine industry in a crisis? How you answer this question depends on where in the industry you sit and how you define a crisis. Certainly the news this year, as reported at The Wine Economist and elsewhere, is not good news. About 10,000 acres of the 60,000+ acres under vine appear to be surplus to requirements. Serious adjustments on both the supply and demand sides of the market are necessary. Change is in the wind.

Crisis and change has been a recurring theme to my economic research starting with my 1990 Oxford University Press book Mountains of Debt. Vested interests, structural rigidities, and simple momentum often lock nations, industries, and people into particular paths while the conditions around them evolve. Sometimes the only thing that can break the pattern is a crisis.

So let’s put the Washington situation in context and think about the future. Herewith several brief points to stimulate thinking.

Crisis is a durable feature of global wine.

The history of wine is a history of crises, mostly local or regional but some (think phylloxera) both global and transformational. University of Adelaide wine economist Kym Anderson’s history of the Australian wine industry, for example, is told in terms of five cycles of boom and bust. If he were to revise his history today, Prof. Anderson would have to add a sixth crisis to the list: the collapse of much of the Aussie industry due to the loss of its biggest export market, China.

Prohibition created crisis in the United States and many other countries a century ago and it took decades for the wine industry to really recover. As I wrote in a chapter of my book Wine Wars II, wine consumption actually increased during the Prohibition period in the United States as consumers exploited a loophole in the law that allowed for home production of up to 200 gallons of wine a year for household use. The quality of much of the wine was very low and alcoholic strength was valued above all.

The legal wine market that emerged when Prohibition was lifted leaned toward sweet, high-proof wines; it took years (until the 1960s in many places) for production of conventional table wines to become the norm. This was as true in Washington as elsewhere, where wines like the NAWICO Port shown here were the popular choice.

Washington’s current wine crisis is part of a global problem.

Washington’s wine crisis hasn’t happened in isolation. It is best scen in the context of a global wine glut, which has been the focus of several recent Wine Economist columns. As global wine consumption first stalled and then declined after several decades of steady growth the market shifts mean there is too much wine produced and too many vineyards growing grapes. It happened slowly and then suddenly and it happened almost everywhere. In Washington and California. In Bordeaux and Rioja. A friend reports driving by abandoned vineyards in Tuscany.

Like Tolstoy’s unhappy families, the story of each afflicted wine region is different, but they all happen in the context of global over-supply. Exporting  your way out of a wine surplus is harder when so many others are trying to do the same.

Washington’s Wine Crises: California Wine Bill

Washington is no stranger to wine crisis, as I have written on The Wine Economist, and it is interesting to review two cases in particular: the California Wine Bill of 1969 and the Langguth wine bust of the 1980s. Both situations were damaging at the time, but proved useful in the longer-term evoluations of the industry.

Wine sales became legal with the end of Prohibition but the market in Washington was not completely open. Washington producers gained a measure of protection from out-of-state (that is, California) producers because they could work directly with distributors whereas “foreign” wine had to go through the state liquor agency.

The California Wine Bill of 1969 (I have heard it called the “Gallo Bill”) leveled the playing field and took away the home-state advantage. Washington producers could not compete with the inexpensive wines that flooded in from California and so they were forced to turn up-market for sales. A quality wine indsutry emerged since that was the only kind that made sense.

As The Wine Economist reported, the Washington industry’s long-term decline as a protected industry reversed course and the modern wine sector emerged. The transition was far from painless and some producers disappeared. But Chateau Ste Michelle, Washington’s leading wine producer, can trace its roots back to the NAWICO and Pommerelle wines that the California Wine Bill crisis helped erase from store shelves.

Langguth Boom and Bust

The successful German wine giant F.W. Langguth boasts a brand portfolio that includes the famous Blue Nun brand. Langguth was attracted to Washington state by the success of Chateau Ste Michelle’s Riesling wines (which are still today, I think, one of the most popular on-premise by-the-glass wine selections).  Seeking to ride Riesling’s rising tide, they became the first important international investors in the Washington wine industry when they entered the market in the early 1980s.

Vineyards and a winery were required and soon appeared. The owners of Sagemoor Farms agreed to develop the 221-acre Weinbau vineyard on the previously vine-free Wahluke Slope. A state-of-the-art $5 million winery was constructed near Mattawa, far away form Chateau Ste Michelle’s big facility near Seattle.

Five million dollars doesn’t seem like a lot of money for a winery today, but back then it was big bucks (Ste Michelle’s big complex in Woodinville, built just a few years earlier, cost about $7 million). To build such a big winery out in the middle of nowhere on speculation of future market growth must have seemed crazy.

And, in fact, the project collapsed in just a few years and the Langguth family pullled out of Washington state. The history of the project makes good reading. Opinions vary about what caused the collapse. Maybe the project was ahead of its time (dry Riesling, for example, when sweeter wines were the market sweet spot). Maybe the project was poorly managed, with too much distance between those pulling the strings and those actually doing the work.

In any case, the Langguth label disappeared. The Weinbau Vineyard became a key element of a growing Wahluke Slope vineyard scene. The shiny new production facility was sold to Snoqualmie Vineyards, which was then an important producer and is now a value label in the Ste Michelle portfolio. Mattawa might still be pretty much out in the middle of nowhere, but now there are several shiny facilities producing lots of wine.

Creative Destruction

This brief account of wine industry crises in Washington and around the world has only scratched the surface of the topic. What are the lessons we can learn from this history? The first, which is where this column started, is that crises are a durable feature of the wine industry and once a given crisis is over the best thing to do is to beging preparing for the next one! Some of the crises from a century or more ago (think phylloxera and Prohibition) cast a long shadow that still affects us today in some respects.

But there is another lesson here, which was suggested to me when I talked with Seattle Times writer Erik Lacitis, whose report on Washington wine appeared in the Seattle Times’s Pacific NW Magazine over the weekend. Lacitis didn’t write about wineries closing their doors, although some have done so. Instead, he focused on winery start-ups and the many new folks who enter this business every year.

In fact, as Lacitis makes clear, the industry is remarkably resilient and each painful crisis lays the foundation, in one way or another, for future growth. The California Wine Bill, for example, destroyed part of the Washington industry but set a course for premium wine that was exactly in line with the way the market developed.

The Langguth collapse was painful, too, but left us with those production facilities near Mattawa and the vines that became the Wahluke Slope AVA, one of the state’s most important wine regions.

Is this an overly-optimistic way to think about Washington’s wine problems today? Perhaps. But I note without comments that the Langguth winery near Mattawa is now a custom crush facility, the sort of place where the next generation of Washington wineries get their start.

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Want to dig deeper into Washington wine industry history? I recommend two classic books:

The Wine Project: Washington State’s Winemaking History by Ronald Irvine with Walter L. Clore (1997) and

Washington Wines & Wineries: The Essential Guide 2/e by Paul Gregutt (2010).