Wine Book Reviews: Getting Serious about Prosecco and Rosé

May 29, 2024 By in book reviews, wine, wine history 2 Comments

Here are brief reviews of two new books that tell the stories of two previously under-appreciated wines that have come into their own, but the books do so in completely different ways. Prosecco Superiore first, then  Rosé from Provence.

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The Story of Prosecco Superiore by Susan H. Gordon is a serious book about a serious wine. The first assertion is not hard to appreciate. Derived from Gordon’s doctoral thesis, the book is thick with the signs of academic research: useful and interesting footnotes, an impressive bibliography, and the sort of price tag that takes the breath away from non-academics (professors and their students are hardened by experience when it comes to the cost of these books).

Gordon has seriously thought about how she wants her readers to understand the story (or stories, I think) of Prosecco Superiore. Thus the traditional “Wines of fill-in-the-place” organization is nowhere to be found. Yes, we learn about grape varieties, climate, geography, production methods, and so forth (a.k.a. the usual suspects of wine books), but interwoven and in the context of other factors, especially the history of the people, the region, and Italy itself.

Gordon is very clear. She wants you to work, not be a passive passenger, so what she’s written is more of a workbook than a simple guide. Are you up for the challenge? Good, then you can begin.

Seriously Prosecco

My second assertion (that Prosecco Superiore is a serious wine) may take more convincing and it might be necessary to pour yourself a glass of the wine at some point just to be sure. Prosecco wines have been one of the great wine market success stories of the 21st century, but most of the attention has been focused on Prosecco DOC wines that come from vineyards on the plains. Less notice is given (perhaps because less wine is produced?) to the Prosecco Superiore DOCG wines that come from hillside vineyards in the zones that were the historical birthplace of Prosecco.

I never turn down a glass of Prosecco DOC because even the relatively simple ones, often with a touch of sweetness, are refreshing. Interestingly, many of the best-selling wines are either distributed by U.S. wine firms (Gallo, for example, has market leader La Marca in its stable) or bottled by Italian wineries as private label wines for U.S. wineries (Cupcake Vineyards Prosecco, for example, or the popular Kirkland Signature wine). The Prosecco Superiore you find is more likely to be made by the winery on the label.

Sue and I have been fortunate to visit the Prosecco Superiore region on several occasions (I’ve given lectures at the famous wine school in Conegliano) and we have come to appreciate the differences between Prosecco and Prosecco Superiore (structure and minerality among other things) and among the DOCG wines from different zones. It has been a fascinating study with an unexpected side-effect: happiness. Prosecco Superiore always makes me smile!

Take a Walk

Gordon’s book covers a lot of territory. The original subtitle, we are told, was “Histories, Geographies, Languages, Topographies, Personalities, and Typologies of Prosecco Superiore.” That’s a lot to think about.

But the organizing principle is easy to grasp and enjoy: let’s take a walk. A walk through history. A walk with Antonio Carpenè, without whom Prosecco would not exist. A walk in the Prosecco hills. A walk through the streets of Conegliano. Walking is good exercise, but more importantly, it is done at a pace that lets you notice and appreciate what you see and hear and think about the connections.

Walking is a good thing and walking with Susan H. Gordon as she (and you) encounter all these people, places, things, ideas, and forces is quite an interesting and worthwhile experience.

Like Prosecco Superiore, this book is a serious undertaking. But, also like Prosecco Superiore, it makes you smile the smile that comes from understanding something more serious than you thought it was.

 

The Book of Rosé: The Provençal Vineyard That Revolutionized Rosé By Whispering Angel and Château D’Esclans (photos by Martin Bruno and text by Lindsey Tramuta).

Is Rosé a serious wine? I suppose it depends on the Rosé and on the wine drinker, but there was a time when “serious” wine people tended to look down their noses at pink “swimming pool” wines. (Even today there are Rosé wines with swimming pool brand names or label graphics.)

A Hundred Bucks?

That situation has changed and a reason why is the subject of this book, Sacha Lichine and his Chateau d’Esclan wines. Lichine (son of the famous Alexis Lichine, the “Pope of Wine,” who did so much to develop wine market and culture in the United States) embraced the Rosé challenge almost 20 years ago. Working with Bordeaux’s famous  Patrick Léon and taking advantage of seriously old vines on the property, Lichine produced a wine called Garrus, which sold for more than $100.

A hundred bucks for a Rosé? He must have been crazy. But the impact was as dramatic as the price. Like Angelo Gaja, who raised prices and expectations in Italy years before, Lichine’s shockingly high price forced buyers to reconsider their prejudices and stimulated growers and other producers to up their game in terms of quality.

Whispering Angel

Old vine Garrus is still the top of the line, but Whispering Angel is perhaps the most popular of the portfolio of Provence Rosé wines on offer by Chateau d’Esclan. My favorite book chapter follows Lichine and colleagues as they set out to market Whispering Angel to a skeptical worldwide market. It is clear that Lichine and team knew who they wanted to drink their wines, where,  and on what occasions, with an eye to creating a luxury brand. They then set out purposefully and patiently to achieve this goal. Required reading for wine marketing students.

The Story of Prosecco Superiore demands a lot of its readers. The Book of Rosé is more relaxed. Indeed, it presents itself as a large, heavy, beautifully illustrated coffee-table book with some text woven in. Many will choose to own (or give) it for the photographs alone. But the text, although brief, tells an interesting story that is worth reading.

Two wines, two stories, two ways of telling it. Both worth your attention.

The Big and Hot Guide to Wine 2024

May 21, 2024 By in wine, wine markets 3 Comments

When you’re hot, you’re hot (and when you’re not, you’re not). That’s the way it is in the wine market today.

One of the most interesting charts at the “State of the Industry” session at this year’s Unified Wine & Grape Symposium was Danny Brager’s analysis of what I call the U.S. wine market’s “Big and Hot” situation.

The gist of the slide was that the market categories that are the biggest are not very hot (indeed, most of them are shrinkingly cold) and that the market categories that are hot and growing are relatively small. Under these circumstances, it is hard to see an “engine” category that might pull the overall market out of its current slump.

It has been a while since we published a Wine Economist “Big and Hot” column, so let’s take a closer look using the NIQ data for the 52 weeks that ended on February 24, 2024,  taken from the May 2024 issue of Wine Business Monthly. NIQ captures the big chunk of the U.S. wine market that flows through distribution channels that large wineries depend upon, but doesn’t include everything, especially DTC sales that many small and medium-sized wineries depend upon.

Reference Points

The NIQ data report both volume and value numbers. Total  measured sales for the 52-week period were $15.4 billion on 142 million 9-liter case equivalents. That was down 2.9% by value and down 4.2% by volume over the previous year.

The “Big” wines in various categories measured by value are as follows:

  • Domestic $11.1 billion vs Imported $4.3 billion
  • Among imports: Italy $1.4 billion, New Zealand $690 million, France $637 million.
  • Among domestic: California $10.0 billion, Washington $509 million, Oregon $290 million.
  • By grape variety: Cabernet Sauvignon $3.1 billion, Chardonnay $2.6 billion, Pinot Noir $1.5 billion, Sauvignon Blanc 1.4 billion.
  • Blends: Red blends $1.9 billion, Rose blends $608 million, White blends $237 million.
  • By price point (glass): super-premium ($11 to $14.99) $3.7 billion, Premium ($8 to $11.99) $2.5 billion, Popular ($4-$7.99) $2.4 billion.

What’s Big and Hot?

The Big and Hot winners are easy to identify because there are only two Big categories that experienced positive growth during the period under consideration and they are so closely related that they are nearly the same: New Zealand (+2.1% by value) and Sauvignon Blanc (+4.1%)! Indeed, tiny New Zealand accounts for almost half of all U.S. Sauvignon Blanc sales by value.

If you’ve noticed a lot of Costco shopping carts filled with Kim Crawford or Kirkland Signature Marlborough Sauvignon Blanc, you are not hallucinating. That’s the Big and Hot effect.

Three-liter boxes are pretty big ($856 million) and growing by 2.4%, but no other “Big” category grew during this period, although some declined by less than the overall market (which is sort of damning with faint praise). Chardonnay sales fell by only 1.9%, for example. A rising tide doesn’t always raise all boats, but this ebb tide seems to be dragging almost everyone out to sea with it.

Hot But Not Big

As Danny Brager noted at the Unified Symposium, the market is growing in smaller, niche categories, not the large segments. Red blends, a Big, are down more than 5%, for example. White blends are up slightly (0.3%), but are a small category by comparison. Two countries have experienced good growth recently, but from a relatively small base:

  • South Africa 5.5% growth ($37 million)
  • Portugal 3.4% growth ($53 million)

Two very different categories that experienced growth with substantial sales present something of a puzzle. Luxury glass ($20-$24.99) 0.6% growth ($867 million) beat the market average despite an overage price of $22.24. Chile 2.5% growth ($373 million) did much better in terms of growth, but sits at the other end of the market with average price of $4.93. It is hard to see the thread that connects these two wine segments.

Do these trends drawn from the NIQ data apply to smaller wineries that rely more on wine club and cellar door sales? I would be interested in reader reactions to this question. I am especially interested in the shifts among wine grape varieties and price points. As always, please keep comments short and to the point.

Starbucks and the Wine Market: An Update

Last week’s  Wine Economist column compared the current wine market situation with the problems being faced by Starbucks, the super-premium coffee chain. Tighter consumer budgets seem to be cutting into the sales of both wine, which is expensive on a per-serving basis, and Starbucks, which isn’t exactly a low-cost option either.

This week’s Economist newspaper features an article that compares Starbucks problem to that of President Joe Biden. You can evaluate this argument for yourself, but what interests me is the more detailed breakdown of Starbucks’ declining sales, which might be relevant for wine.

Starbucks has at least two types of customers. There are the committed regulars who most often visit in the morning. They load money on their Starbucks app, which they use to order coffee and other Starbucks products. I have read elsewhere that the “float” on the money that has been put on the app but not yet spent is a significant revenue stream for Starbucks, so these are really important customers.

Then there are the “occasional” customers, who more often show up in the afternoon and don’t necessarily use the app. Both the regulars and the occasional customers are important to total sales, just as they are to wine sales. And sales for both groups of consumers are down at Starbucks.

Regular customers are leaving more incomplete orders on the app, the article notes, changing their minds at the last minute. Is it because of unexpected long wait times? Are some of the millions of permutations of the chain’s drinks unavailable? I want what I want when I want it! Or is it because, once they see the total cost of their order, consumers, even regulars, hesitate to hit the order button? Probably some of all three explanations.

The Economist speculates that the decline in occasional customer  business is due mainly to tigher economic conditions, because similar reports are coming from McDonald’s, Shake Shack, and other businesses. It will be interesting to see how Starbucks responds to these challenges and if there are any lessons for wine is the results of their efforts.

Starbucks, McDonald’s, and the Global Wine Glut

May 14, 2024 By in Economic impact, wine, wine markets 3 Comments

Two of the most-read Wine Economist columns of 2023 analyzed theories of the global wine glut. The first focused on demographic theories (generational differences and life-cycle patterns) and the second took aim at economic forces (rising inflation, interest rates, housing costs, consumer and business debt). The first column got more attention. Until now.

A recent OIV report on global wine sales found that consumption measured by volume fell in almost every major consuming country between 2022 and 2023. It really is a global issue. And while there are many factors involved, including rising health concerns, the OIV stressed the economic theory of tighter budgets squeezing consumer choices. Why didn’t the OIV stress demographic trends? I can’t speak for them but it is clear that they are interested in the global problem and not every consuming country has the same demographic pattern as the U.S. Baby boom or lifestyle explanations don’t help us understand the sudden collapse of wine consumption in China, for example, but changing economic circumstances might.

Everyone knows that people are feeling economic strain these days, but can it really be affecting wine sales as much as that? Remember that sales in most countries haven’t collapsed (China being an exception). The volume of consumption has fallen by 2% to 4% in most countries. This is relatively small in percentage, but a big deal to winegrape growers and producers with unsold product.

This is where Starbucks and McDonald’s come in. Both are U.S.-based global firms and both have suffered significant declines, just like wine. I’ve been following the news about both companies recently and I think there are insights that wine producers need to consider.

Starbucks’ share price fell by 15% in a single day recently. Why? The Wall Street Journal published an article about persistently declining sales at the coffee giant. The problem, it noted, was that the company was running out of American customers who are willing to pay $5, $6, $7, or more for a beverage. Starbucks was premiumizing while their customers were belt-tightening. It turns out that many people don’t think they need Starbucks as much as Starbucks maybe needs them. Starbucks’ CEO announced a turnaround plan that seemed to miss the mark and the stock value took a dive.

What is the lesson for wine? Wine is sort of the Starbucks of its own category. Wine is more expensive per serving than other alcoholic beverages. It is a discretionary purchase. Consumers don’t need to buy wine. They don’t need to buy beverage alcohol at all. If only a few percent of them change behavior, you’ve got a Starbucks problem.

McDonald’s might also have lessons for wine. Once upon a time, fast food in general was seen as good value, but rising costs have increased the average drive-thru bill considerably and the volume of traffic has fallen. The McDonald’s CEO recently recognized the economic problem and vowed to restore the value proposition. There are rumors of a $5 hamburger meal, for example. Significantly, McDonald’s stock did not tank upon this announcement.

Perhaps wine needs to reevaluate its value proposition, too. Yes, there are inexpensive wines on the shelf, but are they good value? Consumers don’t seem to think so. Sales volumes have been falling for several years. Significantly, one of the few bright spots in the current market is the premium 3-liter box category ($4+ per bottle equivalent). Apparently many consumers see value here that they don’t find elsewhere on the wine wall.

I am not arguing that health concerns are over-stated or that generational and life-cycle explanations are wrong. But I think that the economic argument about the global wine market is important and wine producers need to take consumer budgets explicitly into account as they move forward. Consumers are feeling the squeeze. How can wine producers address this situation?

Is Orange the New White?

May 7, 2024 By in The Next Big Thing, wine 4 Comments

Orange wine (white wine made with extended skin contact) isn’t new, but some people think it might be the next big thing. Is Orange the new White when it comes to wine?

White the New Red?

These are interesting times for the wine business, as recent OIV studies have shown. Not only is global wine consumption volume falling, but the composition of wine purchases is changing, too. White is the new red, for example, as global consumption of white wines has now exceeded red.

The rise of orange wine might be part of this market reversal because, as Ray Isle wrote in Food & Wine magazine, orange wines are sometimes seen as the white wine for red wine drinkers because of the tannins they pick up during their longer skin-contact period. But orange wine volumes are still small relative to the broader market, so it is too soon to make bold claims about the future.

That said, orange wines may appeal to younger consumers who are also attracted to natural wines. Wine producers today pay close attention to any trend that might draw younger consumers into the market. It is no surprise, therefore, that most wineries Sue and I have visited in the last few years have had at least one tank of orange wine over in the corner to explore the possibilities.

From Georgia to California

Sue and I started thinking about orange wines when we visited Georgia, the cradle of wine, a few years ago and tasted white wines made in the traditional qveri process. The best of the wines were alive in the glass in a way that we seldom experience and, although skin contact wasn’t the whole story, it was part of the experience. Wines from Gotsa Family Wines, Pheastant’s Tears, Iago’s Wine Cellar, and the Alaverdi Monastery especially stood out.

Last year we enjoyed what someone called an “entry-level” orange wine from Bonny Doon called “Le Cigare Orange.” A skin-contact blend featuring Grenache Blanc, it was indeed a good introduction to orange wines made in a modern style.

The Vice Orange

It was easy to say yes, therefore, when we were offered orange wine samples from a Napa Valley winery called The Vice. The Vice focuses on small-batch single-varietal wines. Significantly, orange seems to be the new white at The Vice in the sense that a majority of their “white wines” (including our samples) get extended skin contact treatment.

We started with “Pickleball,” an Orange of Viognier made with grapes from Napa’s Oak Knoll District and aged for a year in neutral French oak. Tiny production: just 420 cases today. I was especially curious about this wine because normal Viognier is sometimes recommended as the white wine for red wine drinkers. How would the extra skin contact (plus oak aging) change the equation?

The answer was revealing. The wine was more restrained than I expected. It was clear that the winemaker aimed to make a stylish Viognier (that just happens to be orange) rather than an in-your-face Orange wine (that just happens to be Viognier). Do you know what I mean? Given the choice, I think I’d opt for this restrained approach every time.

Next Big Thing?

Next up was “Brooklynites 5.0,” an orange wine made with Gewurtztraminer from Los Carneros. It had been aged eight months in a combination of stainless steel tanks and concrete eggs. It was pretty, especially with the classy white and gold label. The aromas jumped from the glass followed by a spell by Gewurtz’s character and flavor. Dry, savory, great with prosciutto-wrapped asparagus. Restrained, like the Viognier, but with more going on in the glass.

The Vice has embraced orange wine, suggesting that “Orange is the New Napa,” which ought to get your attention. Their latest release includes five count ’em five orange wines according to the recent press release:

  • Orange of Gewurztraminer “Brooklynites 5.0”, Los Carneros, 2022 / 13.7% Alc. SRP: $35.00.
  • Orange of Viognier, “Pickleball”, Oak Knoll District, 2022 / 13.7% Alc. SRP: $38.00.
  • Orange of Sauvignon Blanc, “Sierra”, 2023, Los Carneros, 2023 / 13.4% Alc. SRP: $36.00
  • Orange of Albarino, “Sevilla”, California, 2023 / SRP: $38.00
  • Orange of Chardonnay, “Las Amigas”, Los Carneros, 2023 / 12.8% Alc. SRP: $65.00

Is Orange the new White? No, it’s a thing of its own, based on our sampling so far, and not a gimmick, either. Red, White, Pink, Orange, let a thousand colors,  hues, and shades come out of the tanks in the corner and onto the dinner table.

Wine could use a burst of adrenaline just now. Orange wine can’t do the job on its own, but it is a shot in the arm for anyone looking for something new to like in wine.

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Roger C. Bohmrich, Master of Wine, is the author of an excellent analysis of the Orange wine market, ” Orange Wines: Bridge to the Past and Trending Wine,” which appeared in Wine Business Monthly (January 2024, pp. 60-65). WBM subscribers can access the article on-line by following the link.

GD Vajra: Once Upon a Time in Barolo

April 30, 2024 By in Italian wine, wine, wine markets 2 Comments

Once upon a time … That’s how many of our most beloved stories begin, so that’s how we begin this report on the wines of G.D. Vajra. These wines might be best understood in the context of the stories about them. And the stories have surely helped us understand and appreciate what we found in our wine glasses.

So … once upon a time Sue and I were invited to take part in a Zoom interview with Giuseppe Vaira, the second-generation family winemaker of G.D. Vajra. It was a great pleasure to spend an hour (even a web hour) with him.  If you ask him a question, he will tell you a story (once upon a time …) using metaphors to communicate both facts and feelings. I think you can get a sense of what I am talking about from this video. 

Every Glass Tells a Story

Mr. Vaira is such an engaging person that it would be difficult not to like his wines, but the memory of his stories certainly added to the experience. Here are three brief examples to show you what I mean.

Barolo is famous for Barolo, of course. That’s what they make and export around the world. But what do Barolo winemakers like to drink, Mr. Vaira asked. Dolcetto! Not, he made certain to add, because they are cheap (it would be difficult to get as much for a Dolcetto as for a Barolo), but because it can make such an appealing wine.

Dolcetto was once widely planted (and enjoyed), but it lost out to Nebbiolo when the region was replanted after Phyloxxera. G.D. Vajra began making a very special Dolcetto Costa&Fossati in 1979 and it shows what Dolcetto can be. Complex, elegant, great with food. Who would not want to drink a wine like this?  Mr. Vaira’s story made us pull the cork and now we can’t think of Dolcetto the same way.

The Sun? Or the Moon?

The second story is about Freisa, an ancient Piemonte grape variety that you rarely see anymore. Freisa was once very common in the region, we learned and used it to make the base wine for Vermouth. But then came Prohibition in the United States and the bottom dropped out of the Vermouth export market. Most Freisa vines were pulled out so only a little is left.  Many different styles of wine are made from Freisa today, so it would be easy for consumers to get confused. What is Freisa? Well, it depends.

G.D. Vajra’s Freisa “Kyè” plays on this theme. Look at the label. Is it the sun? Or the moon? Hard to pin down. As you might imagine, our minds were racing as we tasted this wine. I imagined that I could sense the Vermouth connection, but that might be the power of suggestion. A unique experience, more moon than sun for me, but maybe it was the residual effect of that solar eclipse a few weeks ago?

At one point Mr. Vaira suggested that we taste the 2020 Barolo wines over a couple of days to appreciate how they evolve. We took it as an opening to sample two different wines, half on one might and half on the next so that we could both compare the terroirs and experience the evolution. You’d do the same thing, wouldn’t you?

Turn It Up to Eleven?

Inevitably each wine came with an image or story to provoke our imaginations. The Coste di Rose comes from a small steep vineyard at the top of a hill. Reaching to the top, the notes tell me, that you are confronted with a tall sandstone dune, a dramatic sight that makes this vineyard’s unique soil profile clear. A wine with emotion, according to the tasting note, with tones of cherry and rose petals, mint, and sweet spices.

I selected the Ravera Barolo to complement the Bricco delle Viole partly because of the difference in terroir but, I admit, mainly because of a note I found where Giuseppe Vaira says, “I am intrigued by Ravera’s indomitable personality. It is crisp like the sound of a Telecaster, straight and electric.” How can you not taste a wine that evokes the iconic Fender guitar that has featured on so many rock hits?

The experiment was quite an experience. The two wines were indeed quite different from each other, showing the influence of terroir, and the second night tasting added more depth and richness. It reminded me of my friend Brian’s advice to always double-decant Barolo wines. These wines have years of development ahead of them, so it will be interesting to revisit them and see how their stories and personalities have evolved.

An Unexpected Favorite

Of all the G.D. Vajra wines we have tasted so far, Sue and I think the humble Dolcetto is our favorite, which is a surprise. But this isn’t just any Dolcetto because great effort was made to select the best heritage clone vines and to plant them in just the right place (a vineyard plot that would have made great Barolo) to tell the story of this historic wine in the most expressive way.

It doesn’t make economic sense to make a Dolcetto like this, but sometimes there are more important things to consider. It is all about the story at G.D. Vajra. I think that’s why their wines are so appealing.

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An article that begins with “once upon a time” and ends with electric guitars needs a theme soung. Here it is. Enjoy. (It’s a Stratocaster not a Telecaster, but you get the idea!)

Wine Book Review: Discovering the Hidden Vineyards of Paris

April 23, 2024 By in book reviews, history, wine, wine history 3 Comments

Geoffrey Finch, The Hidden Vineyards of Paris (Board and Bench, 2023).

Urban wineries aren’t surprising anymore. It is not that difficult to truck in grapes and other supplies to make (and then sell) wine in the heart of a busy city. City wineries are not as ubiquitous as local craft breweries, but they aren’t hard to find. If you go to Paris, for example, you’ll find a winery on the first floor of the Eifel Tower.

Urban vineyards are a different matter. Cities, by their very nature, are filled up and built over, with what open land that remains after urbanization devoted to parks, playgrounds, and so forth. A vineyard? That would be a surprise.

But of course, cities have not always looked and operated as they do today. Before the advent of cheap and secure transport, for example, cities had to be much more self-sufficient than they are today. Food could not cheaply and reliably come from far away, so local sourcing was vital. This was especially true for wine in Europe because of its central place in diet, culture, and economy.

You can find remnants of the old vineyards if you look for them. In Venice, for example, the Venissa vineyard is a short vaporetto ride from St Mark’s Square. It’s a different side of Venice, serene like the city itself (La Serrenisima) once was.  Sue and I love the vineyard and the hotel and restaurant that the Bisol family has developed.

But wait … there’s more! If you know where to look in Milan you can find the evidence of Leonardo’s personal vineyard reconstructed, according to Professor Scienza, using DNA analysis. Add that to your bucket list!

I was amazed to discover that Paris was once the center of the largest vineyard area in France and the world. This makes sense, however, since the city’s large population required wine, and the local environment was well-suited to grape farming. Parisian vineyards declined slowly and then suddenly, however, due to a number of forces including especially the arrival of the train, which delivered quantities of wines that were better than the local ones (from Burgundy and Bordeaux) or much cheaper (from Langudeoc and eventually Algeria, too).

Parisian vineyards declined but did not entirely disappear. You have to look closely to find them, however, which is what Geoffrey Finch has been doing for over 40 years. His new book is a slim volume packed with insights, information, and colorful illustrations that tell the story of grapes, wine, and Paris.

Finch guides us through vineyards that are used to produce wine, vineyards that don’t yield wine but serve other purposes, and isolated vines too random to be called vineyards but that tell interesting stories. Even the largest of these vineyards is small by the standards of Bordeaux or even Burgundy, but size isn’t the point here. Rather they are a chance to encounter the history of Paris and wine and, if you are lucky, have a taste, too.

We have visited Paris several times, but have never been to Clos Montmartre, the largest vineyards and the only one with commercially available wine. There is even a community wine festival. It’s on our list for the next Paris expedition.

It would be great to visit these vineyards with Finch on one of his tours and to hear his stories in person, but reading The Hidden Vineyards of Paris must be the next best thing because of his distinct sensibility, insatiable curiosity, and obvious fascination with Parisian history. Each vineyard (or individual vine in some cases) has a history that is specific to its subject and also reflective of Paris more generally. Each is a pleasure to read and appreciate.

Taken together, the vineyards and their biographies give a rich sense of what Paris is, has been, and perhaps might be again. The Hidden Vineyards of Paris is informative, entertaining, and well-written. Highly recommended.b

Roots to Resilience and Success for Ontario’s Wine Industry

April 16, 2024 By in wine, wine markets 1 Comment

There has been a lot of troubling wine business news recently and I am watching closely to see if, when, and how the industry can pull together to address the many problems. As I wrote a few weeks ago, Lewis Perdue’s 1999 book “The Wrath of Grapes” criticized wine industry groups for putting individual interests above broader industry needs. Can we do better this time around?

So far this year I have been able to take the industry’s pulse through my participation at the Unified Wine & Grape Symposium in Sacramento and virtual and in-person speaking events in Idaho, Burgundy, Moldova, and the Eastern Winery Expo and License to Steal workshop in Syracuse. These experiences have left me cautiously optimistic, although narrow interests are a strong force.

I remember a lunch conversation with the owner of a small eastern winery looking for more direct sales opportunities. Off-site tasting rooms were a good option, but the extra sales involve substantial extra cost. What about sharing space with another winery from your region, I suggested? Maybe, was the reply, but not with a real competitor. Understood, but that limits cooperation. And that’s a problem if you are trying to grow the wine market pie rather than just grab a bigger slice.

My next stop is Niagara-on-the-Lake, Ontario, for the 6th Ontario Craft Wine Conference. The one-day program plus trade show packs in a lot of opportunities to learn, teach, talk, listen, and build new and honor old relationships.  There are four tracks for specialized workshops: finance/operations, human resources, sales/marketing/digital, and technical/winemaking.

There are also three general “keynote” sessions where I hope everyone will gather. The day starts out with Spanish winemaker extraordinaire Almudena Alberca MW discussing “The Future of Premium Wine Production.” I take the stage right after lunch with a talk about “Secrets of the World’s Most Respected Wine Regions.” Elaine Chukan Brown addresses ” Building New & Diverse Opportunities in Wine” to close out the day’s formal program.

A reception follows and, if past is prologue, this is where a lot of the most important discussions will take place. It promises to be a full, intense day. Looking forward to it.

Can the wine industry pull together to address today’s problems? The Ontario conference title is “Roots to Resilience and Success for Ontario’s Wine Industry.” Resilience is certainly the name of the game today. Success in the future will be best achieved if the the industry can find ways to pull together.

Kind of Malbec: Mendoza Wine + Business Collaboration

April 9, 2024 By in Argentina, wine, wine brands, wine markets 3 Comments

“Kind of Blue” is one of my favorite jazz albums and, although we usually think of it as a Miles Davis work, it is really a collaboration of talented artists at the height of their powers.  Recorded in 1959, it features John Coltrane, Cannonball Adderly, and Bill Evans among others (who can forget Paul Chambers’ bass on the title track?). A timeless classic.

Wine is like jazz in many ways, including the power of ensemble work. Although we often give credit for a wine to the head winemaker, there is usually a team involved. The collaboration can take many forms. Recently, for example, Sue and I have sampled the wines of Ventisquero made by Chilean Felipe Tosso and Australian John Duval (of Penfolds Grange fame). Their “Obliqua” Carmenere, the result of a 20-year collaboration, was probably the best version of this wine we have tasted. The two winemakers harmonize well indeed!

Here in Washington State, the Long Shadows winery is organized like an album of duets. Allen Shoup, who founded the project, invited renowned winemakers from around the world (including John Duval, as it happens) to work with his team to make their version of Washington wines. The idea was to showcase what Washington can produce (and it has done that successfully) and give the international winemakers a new melody to riff on.

Miles Ahead: Marcelo Pelleriti

We were recently introduced to the wines of Pelleriti Priore, which are the result of a different sort of collaboration that makes complete sense. Marcelo Pelleriti is kind of the Miles Davis of the team. He is a rockstar (to mix musical genres) winemaker who has worked in both his native Mendoza and in France. An associate of Michel Rolland, Pelleriti has made famous wines in both hemispheres. His focus today, however, is Argentina, which is a great place to grow wine, but a difficult place to grow a wine business because of its many economic problems.

If Pelleriti is Miles Davis, then Miguel Priore is more like Bill Evans on the piano, driving the project forward and creating the foundation for Pelleriti to riff. Priore, also a Mendoza native, knows the region’s terroir, too, but especially contributes his understanding of the business side of wine to the partnership. Pelleriti makes great wine, Priore makes the great wine business possible. Together with other members of the Pelleriti Priore team, they are a tight ensemble.

The Business Side: Miguel Priore

The business side is very serious and I can see how it empowers Pelleriti. They insist on owning their vineyards, which is a very considerable investment. They have also invested to ensure effective distribution of their winery’s 50,000 case annual production both in the United States and in Europe. Looking to the long run, they have prioritized wine quality and providing their clients quality service over other factors.

I had to ask Miguel Priore about the problems of doing business in Argentina, with its high inflation and uncertain future given new President Milei’s bold policies and strong opposition. Priore acknowledged the challenges, but business in Argentina is accustomed to headwinds and his intent is to provide Pelleriti with a firm economic foundation for winegrowing and to insulate buyers from the economic changes, too. This is the right approach, but not easy to do. Makes me appreciate how important both parts of this duet are to the final product.

Kind of Malbec

In vino veritas, they say, and this was one of those times when the wines sang in harmony with their reputation. Sue and I tried two Malbecs from the Flagship line, a Marcelo Pelleriti Signature Malbec made from old vines and the 1853 Selected Parcel Malbec made from very old (more than 100 years!) vines. The year 1853 is significant for Argentina; it was when the first Malbec vines arrived from France.

Sue and I are now working our way through the next level of Marcelo Pelleriti and 1853 wines   Last night we opened an Altamira Malbec they call Terroir Expressions “Hostage.” Why “hostage?” Because once they tasted the fruit from this “old little vineyard,” they felt themselvews held hostage to its charms. It is a real pleasure to experience the complex harmony. Powerful. Elegant. Unique.

Kinda reminds me of “Kind of Blue.” Another timeless classic?

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P.S. Although he is best known for rock and roll, I don’t think Marcelo Pelleriti will object to the jazz references in this article. When Sue and I interviewed the two protagonists via Zoom I noticed that Pelleriti was wearing a vintage Ramones t-shirt under his jacket.

Wine Books Revisited: Lewis Perdue’s “The Wrath of Grapes”

March 26, 2024 By in book reviews, economic crisis, wine, wine markets 5 Comments

A look back at The Wrath of Grapes by Lewis Perdue (Spike Books / Avon, 1999).

Over long, hard decades, American winemakers have won the respect of connoisseurs everywhere. Many of the world’s most cherished, and expensive, wines come from the United States. But today, the unique and eccentric wine industry faces a grim set of challenges that could transform it forever: oversupply in the face of flat consumption, devastating vineyard diseases, an antiquated distribution system, fierce competition from abroad, attacks from anti-alcohol forces, and an inability to capitalize on wine’s proven health benefits.

Sound familiar? This list of problems plaguing the wine industry reads like it could be taken from today’s wine industry news headlines. But it comes instead from the back cover of a 1999 book by Lewis Perdue. What can a 25-year-old analysis of the wine industry’s woes tell us that will help us today? I couldn’t resist looking back. Here is what I found.

Is It Time Yet?

The Wrath of Grapes was one of the first books I read when I started studying the wine business. Going back to it now I am impressed with how relevant it remains today and how much it has obviously shaped my thinking about the wine industry.

The first part of Perdue’s book is a sharp critique of the American wine industry. Why don’t consumers buy more wine? Because the way that wine is marketed confuses and intimidates them. Perdue cites the famous Paul Masson ad campaign starring Orson Welles as an example. The tagline “We will sell no wine before its time” was meant to assure consumers that Paul Masson was mature and ready to drink. But, consumers might have wondered, does this mean there is a wrong time to drink this wine? Maybe I’d better stick to beer!

It might be possible to overcome the misguided marketing strategies of individual wineries through an effective generic marketing campaign, Perdue suggests. But the wine industry is too dysfunctional to do anything important. Leadership and followership both fail at critical points.  Vested interests focus on share of the wine market pie, so little is done to grow it.

I am not enough of an insider to evaluate Perdue’s critique of industry politics either then or now, but he pulls no punches in casting blame. Only one industry group, Women for WineSense, is praised for their effectiveness.

An even bigger problem than marketing is the lack of a cohesive strategy to address concerns about wine and health and the neo-prohibitionists who push for policies to reduce and restrict wine consumption. If nothing is done on this front, Perdue asserts, falling consumption is assured. Well, nothing much was done and here we are.

Love, Not Money

Part II is titled “Investing in Wine” and it takes the topic broadly, offering advice and analysis for those thinking of investing in a vineyard or winery, investing in fine wines for resale, and investing in the wine business through common stocks. Is investing in wine a matter of love or money? I suspect that most people would say “both,” but Perdue warns that you’d better be doing it for love because there are other ways to earn similar returns with less risk.

I think this was the first time I had seen an economic breakdown of a bottle of wine. Where does the money go to produce the wine (hint: grapes are not the biggest cost)? And how is the final price distributed between producer, distributor, and final seller? The specific numbers are different today, of course, but the fundamental analysis remains shockingly relevant.

Perdue’s hard-nosed analysis of wine-related common stock opportunities circa 1999 makes interesting reading. Coming from a Silicon Valley venture capital background, he is very objective about business models and risks and, interestingly, pays some attention to the perks such as wine discounts or special events that some of the wine companies offer their shareholders. He sees the perks as part of the “love” you need to get out of your wine investment to compensate for the risky return.

But perks aren’t everything. If you read Perdue’s analysis of the Robert Mondavi company, for example, you can appreciate the troubles that were building in its business model and why it got into such trouble a few years later. You’d need a lot of discounts on Opus One to compensate for the underlying economic woes.

There are three useful appendices. The first explains financial ratios, which anyone needs to understand to make sound investment choices, but not everyone thinks about when contemplating wine. Vineyard finance is the second topic, explored through a simple example of the sort of financial analysis that an intelligent investor should consider. The book concludes with a brief statement about wine and health.

Back to the Future?

Although some parts of The Wrath Grapes have naturally aged better than others, the book’s overall argument remains timely and relevant. Most of the big problems that Perdue wanted us to take seriously 25 years ago remain at the top of the agenda. No wonder the book is still in print.

If you haven’t read The Wrath of Grapes in a while, it’s time to look back at what Lewis Perdue was saying 25 years ago so that you can look ahead with more insight.

The Tax Man, Carl Lewis, and the Paradox of South African Wine

March 19, 2024 By in economic crisis, Economic impact, South Africa, wine, wine markets 4 Comments

It was an unlikely pairing. Thirty years ago the legendary Olympic champion Carl Lewis became the face of Pirelli, the Italian tire maker. “Power is nothing without control,” the advertisements proclaimed.

This photo of sprinter Lewis in high heels made the point very well (as did a spectacular television commercial). Power without a strong foundation isn’t very useful. It is important to assess situations from the ground up (where the “rubber meets the road”) rather than simply top-down.

The Tax Man Cometh

What prompts my interest in vintage tire advertisements?  I am inspired by recent reports from South Africa. The wine industry there, as I will explain below, is robust and resilient, and yet fragile. However, the South African government doesn’t seem to appreciate the situation’s complexity and has recently announced an excise increase of 7.17% on still wine, 7.17% on sparkling wine, and 6.67% on brandy. This is a harsh blow to an economically important but fragile industry just as it moves to recover more fully from the dismal pandemic days.

It is worth noting that South Africa is not the only wine region facing detrimental tax or other policies. One survey of winegrowers in Ontario, for example, lists discriminatory tax treatment as one of the top two or three headwinds and I know other regions with similar concerns.

It seems to me that the officials behind this tax fail to appreciate the wine industry’s double nature. It is robust, resilient, and an important economic driver of the national and many local economies, which is something to be protected. But, at the same time, it is fragile because the foundation of the wine industry is farming, and especially in South Africa, that is a difficult business.

Read the Report!

I recommend that government officials study a recent report issued by South Africa Wine titled “Macro-Economic Impact of the Wine Industry on the South African Economy.” The report traces the economic impact of the wine and brandy industry on the South African economy, making the case that it is an effective driver of economic growth.

The wine and brandy industry’s extensive value chain, which is deeply rooted in agriculture, has, over the past 365 years, played a significant role in South Africa’s cultural and economic history. Its distinct role within the South African alcohol industry landscape includes an extensive rural footprint, tourism, foreign revenue via exports of wine to more than 120 countries, and the associated brand reputation for the country.

You would not think it necessary to make such a case, but the industry suffered a variety of headwinds in recent years, including devastating drought and covid-related policies that banned the domestic sale of alcoholic beverages for long periods and also limited port access that is necessary for export shipments. What a nightmare!

Unsustainable Foundations

So it is important to dig down into the report to assess the condition on the ground, which in this case means the wine growers. The news is not good.  Winegrape growers in South Africa, as in many places including the United States, have been hit with rising costs and limited opportunities for price increases. Margins have been squeezed like a fragile grape.

This chart from the report shows how quickly a fragile situation has worsened. In 2018 only 20 percent of grape farmers reported profits high enough to justify continued investment. Fifty-two percent of growers reported unsustainably low profits. Twenty-nine percent experienced losses. This is a picture of an industry on the edge.

Fast forward to the 2022 vintage and you can see that conditions deteriorated significantly. Only 12 percent of growers experienced sustainable profits while nearly a third reported losses and almost half unsustainably low net revenues. It is no wonder that hectares under vine have been in steady decline.

The Curse of Stein’s Law

In the past, the report explains, winegrowers have responded to higher costs by pushing up vineyard yields rather than through price increases. This strategy is difficult to sustain, however, and Stein’s Law holds that if something cannot go on forever, it will eventually stop. The steadily falling quantity of producing vineyard land indicates Stein’s Law at work.

So what should the government do when an economically important industry, with substantial domestic and international backward and forward linkages, is in such a fragile condition? Raising taxes on its products doesn’t seem like the obvious answer. Some may argue that the tax increases are intended to reduce alcohol abuse, which they might do, except for the existence of robust illegal alcohol markets, which would likely expand as the regulated market declines.

The South African wine industry has many problems, just like other wine regions today, but it has one thing going for it: professional organizations like Sound Africa Wine that provide unusually strong data and analysis that could and should help guide public policy. Now it needs government officials to wake up and understand that the wine industry is a powerful but fragile engine for growth and change and not just a conveniennt source of tax revenue.