- Shopping Bag ( 0 items )
It was the best of wines, it was the worst of wines (apologies to fans of Charles Dickens). The global wineglass it seems is both quite empty and full to the brim.
We live today in the best of times for wine if we evaluate the situation objectively as economists like me are trained to do. Never before has so much good wine been made and so many wine choices offered up to consumers. For someone who loves wine, the glass is very full indeed; it is hard to imagine better days than these. The global markets deliver a world of wine to your door. Drink up!
And yet many enthusiasts are anxious about the future of wine. The good news we find in our wineglasses and on the supermarket shelves is often accompanied by disturbing rumors, feelings, and forecasts.
It is the worst of times, too, you see—especially if you are a maker of cheap wine in France, Italy, or Spain, the largest wine-producing countries. Everything about wine is wrong for you. Consumption is falling, squeezing your market share, and import competition has increased. You find yourself making the wrong wine in the wrong style from the wrong grapes at the wrong price and trying to sell it in the wrong markets. You are betrayed at every turn by the markets that once treated you so well, and now betrayed as well by the European Union, which once bought up your surplus wine lake and now tells you coldly to "grub up" your worthless vines. You hold an empty glass, or so it must seem.
Times are troubling in Australia, too, where a wine boom has been followed by a wine bust as consumers around the world have seemingly turned away from the muscular Aussie wines they enjoyed so much just a few years ago. Recession, falling consumption, rising antidrinking lobbies, water shortages, global warming, and even raging brush fires all threaten the livelihoods of winegrowers and producers in many parts of the globe.
It is the worst of times for consumers, too, or so it is said, if they seek that special taste of a place that wine geeks like me call terroir. The wine in your half-empty glass is free of any technical flaw, but so what? Does it have a soul? Does it express any particular place or any producer's distinct vision of what wine should be? This is the age of McWine, I have heard people say: wine that is all the same. When everything is the same, then it is all nothing! And what's worse than that?
These are good times and bad ones, too, for the world of wine—what a contradiction! What about the future? Will wine's tale of two glasses have a happy ending? Or will our (excuse the pun) "grape expectations" be crushed? I'm an optimist about the future of wine, but as an economist I am trained to pay close attention to the "dismal" side of any situation. I wrote this book to try to find out just how empty or full the global glass really is and how the world of wine is likely to change.
The first thing to understand about wine is that it is many things, not just one, both in terms of wine itself and the economic forces that drive the wine industry, so the story of the future of wine will necessarily be a complicated one. Although hundreds of particular factors will come into play as the wine world evolves, three big forces will almost certainly shape the overall pattern: globalization, Two Buck Chuck, and the revenge of the terroirists. Globalization and Two Buck Chuck are economic push forces that are transforming the world of wine. The revenge of the terroirists is all about pushing back, but with a twist because global climate change is going to force us to change the way we think about terroir.
GLOBALIZATION: REDRAWING THE WORLD WINE MAP
Globalization comes first. It isn't something new, as we will see, but it is a powerful force that is becoming even stronger. It is quite literally redrawing the world wine map, pushing it out from the old World where most of the earth's wine is still produced to many New Worlds where both production and consumption are on the rise.
Wine has become a global or nearly global phenomenon, produced in a growing number of countries and widely consumed (except where religious edict forbids it). Most wine, however, is surprisingly local, produced and consumed in the same country and often the same region. There is enough wine traded internationally, however, to provide wine consumers with the impression of complete globalization.
Ironically, the most global wines live at the top and bottom of the "wine wall," my name for the various real and virtual spaces where wine enthusiasts (as demand) confront the vast and often confusing supply of available wine. The top shelf holds Champagne, of course, and iconic wines that can sell for hundreds and even thousands of dollars. These wines travel the world, reaching collectors, investors, connoisseurs, and upwardly mobile wine snob wannabes wherever they live. Asia is a hot market for these wines just now, but really they end up everywhere.
The bottom shelf of the wine wall holds inexpensive generic wines that can sell for as little as two dollars in the United States. In the European Union you can get a liter of this wine for a single euro coin (VAT included). Some of these wines are packaged in traditional 750 ml bottles, but most of them come in other sorts of packages—1.5 liter bottles, foil-lined cardboard tubes that look like exaggerated juice packs, and 3 and 5 liter "casks" of wine, cardboard boxes containing special plastic bags. You get to the wine through a spigot, not by pulling a cork, with these "box" or bag-in-box wines.
Whereas status and prestige pull iconic wines to the four corners of the globe, cost concerns drive the generic wine trade. Cost is key on the bottom of the wine wall and there is always cheaper wine somewhere in the world. With the advent of efficient bulk wine shipping (huge bags of wine in huge ocean shipping containers) even relatively small differences in price can unleash tidal waves of wine. Thus cheap wine in China (some of it even labeled "Chinese wine") makes a long journey from Chile while the Pinot Noir sold by a California-based brand might come from the South of France, Northern Italy, Chile, or somewhere else. It's a small world after all down there on the bottom shelf.
The vast majority of wines made today are neither top-shelf trophies nor bottom-bin bulk. These midwall wines, generally consumed closer to home than you might expect, are numerous enough to create a kaleidoscopic if slightly misleading image of wine globalization, especially if you live in Great Britain or the United States, the two most important markets for global wine today. (Germany, as we will see, is the third great international market, but Germans prefer their wine cheap and cheerful—they lap up that euro-a-liter stuff—so they are best seen as an important but special case.)
If globalization simply meant that more of the world's people are drinking wine and more of the earth's surface is covered with vine, well it wouldn't be very controversial. But it doesn't; money and power are at stake. Money, of course, because vanity vineyards aside, people make wine to make a living. They may seek personal fulfillment or artistic achievement, of course, but they also need to pay the bills. It's hard to completely avoid the bottom line. So globalization is not an abstract concept to winemakers, it is a steely sharp double-edged sword: the prospect of new demand comes with the threat of new competition.
Money is an understandable issue, but power? Yes. The battle for the future of wine is all about power—whose idea of wine will dominate and whose tastes and interests will prevail. You don't have to take my word for it—you can see power politics at work for yourself the next time you go to purchase wine.
The wine wall has many political divisions, each with its own internal power structure. The French wine part of the wall, for example, is organized according to French geography, with Rhone here, Bordeaux there, and Burgundy somewhere else. Power resides (or is meant to reside) with producers in this part of the wine world, and the wine wall makes it clear. But if you move over to any of the New World shelves (California, for example, or Chile or Australia) you'll find a different political organization, dominated by branded varietal wines like Yellow Tail shiraz or Mondavi Woodbridge Chardonnay.
Globalization has brought these political systems into direct conflict. It's like the Cold War all over, only that it isn't just capitalism versus communism—it's more important than that. It's the soul of wine that is at stake. Who will call the shots in the wine market of the future? Who will set the price? Whose palate will prevail? To paraphrase the Chairman on Iron Chef, whose idea of wine will reign supreme?
TWO BUCK CHUCK: WINNING THE CONFIDENCE GAME
Many fear that power and taste will shift from the old World to the New and vin de terroir (wine from the earth) will be replaced with vin du marché (market wine)—wine designed by marketing executives and engineered to appeal to least common denominator palates shaped by long exposure to vast quantities of fizzy, sweet, ice-cold diet Coke.
This is the world, wine snobs say, of Two Buck Chuck—the simple, cheap wine sold in the united states at Trader Joe's supermarkets. Every country has its Two Buck Chuck (sometimes at prices significantly below two dollars!) and every wine snob worries that the global market has unleashed a race to the bottom, where taste and terroir are endangered species and Chuck and his even cheaper cousins will someday rule.
Two Buck Chuck (or TBC for short) is a phenomenon; Trader Joe's sells hundreds of thousands of cases of this low-cost wine each year. TBC is a classic element of the tale of two wines. It has drawn thousands of consumers to the wine wall, introducing them to wine as an affordable quotidian pleasure, but by focusing their attention on the bottom shelf has it encouraged an epidemic of arrested development? TBC has raised the floor on bulk wine in terms of quality, but has it simultaneously lowered the sensory or aesthetic ceiling?
The story of Two Buck Chuck as it is usually told is all about price, quantity, and quality—the economist's familiar playground—but there is more to it than that. The miracle of TBC is not that millions of bottles can be produced at low cost—that's surprisingly easy to do—it is that consumers are willing to buy it! You see, wine is a mystery to most consumers. They have little confidence in their ability to tell what's in the bottle as they stare at the wine wall or puzzle over a restaurant wine list. Some of them are adventurous and treat it as a treasure hunt game, but far too many buy the same thing over and over again (that arrested development problem again) or, worse, walk away in frustration buying nothing at all.
Just cut the price if you want to sell wine—that's what Econ 101 teaches us. Ah, but there is a problem. Insecure wine buyers often read price as a proxy for quality. They are afraid to pay too little for a bottle of wine because they are worried that it will be horrible. Paying more, they believe (falsely, as a general rule), guarantees a better product—but they are also afraid to pay too much. No wonder so many people don't purchase any wine at all! So selling cheap wine is trickier than you might think.
The miracle of Two Buck Chuck is that it has given millions of Americans the confidence they once lacked as they try to stare down the wine wall and make a purchase. The wine business is really a confidence game, if you get my drift, and the future of wine, and the money and power that it brings, will be influenced by how the game is played and who plays it.
THE REVENGE OF THE TERROIRISTS
for many people, globalization and Two Buck Chuck are wholly positive forces—more wine, better wine (or at least fewer bottles that are really, really bad): wine that is easier to understand, purchase, and drink. What could be better? But not everyone shares these happy thoughts. The terroirists sure don't.
Terroirists are people who see the new global wine map and shudder. Terroirists seek to preserve and protect an idea of wine that is more natural, more connected to the earth, more deeply embedded in culture. It would be easy to say that this is an Old World vision of wine, but nothing in wine is ever really as simply as Old versus New. Many of the forces that terroirists oppose most vehemently were invented in France, the Queen of old World Wine.
Do you oppose simple, maybe even stupid wines that exist only because marketing campaigns can sell them? Then you may oppose Yellow Tail or Two Buck Chuck, but you must first confront Beajoulais Nouveau, France's most successful vin du marché. Are you against wine that is highly processed and manipulated, wine that is almost manufactured? Then it is understandable that you may dislike many New World wines, since there are often fewer restrictions on winemaking techniques, but you should hold your greatest contempt for Champagne, a wine that is made underground (not in the vineyard), processed, blended, and sold for huge sums by French luxury goods conglomerates.
The Old World is home to both terroirists and the wines, winemakers, corporations, and critics they oppose. And the New World is too. It's hard to find Old World winemakers who are more committed to the idea of terroir than, say, Randall Grahm of Bonny Doon or John Williams of Frog's Leap. In truth, you won't learn much about terroirism by looking at a physical map— mental maps or moral ones have more to say. But the physical map will tell you something, if you stare at it long enough. Terroir—the idea that wine is deeply rooted in a particular place—is now a moving target.
The problem is global climate change. Now, outside my window I know lots of people who are climate change doubters and think that Al Gore's contribution to world peace (he shared the Nobel Prize in 2007) is overrated. But I've never met anyone in the wine business who has the slightest doubt that climate is changing. The world is getting hotter and the weather more variable and extreme (which means, ironically, that some places are getting cooler, too). Global climate change makes set notions of wine terroir pretty problematic. Interestingly, it both undermines the terroirists' case and makes it stronger.
So the future of wine is up in the air. How can we tell how the battle for the soul of wine will be resolved? The answer, I propose, will be found by taking a sideways approach. Wine enthusiasts are trained to tip their glasses so that they can see how the color changes at the far edges. That's one way to know how a wine has developed and how it may change in the future. In the same way I want to tip the wine world sideways at the end of this book and look at its edges, the places where the change may be greatest: that means looking at China and how the forces of globalization, Two Buck Chuck, and the revenge of the terroirists are shaping that huge potential wine market.
HOW I STUMBLED INTO THE WINE WARS
People often ask me how I became a wine economist, an economist who studies the global wine markets. The answer is rooted in a particular time and place. Sue and I were still newlyweds, taking a low-budget vacation in the Napa Valley back in the day when that was still possible. We were headed north on the Silverado Trail late on our last day, pointed toward our economy motel in Santa Rosa, when we decided to stop for one last tasting.
The winery name was very familiar and I had high hopes for our tasting. If I had known more about wine back then I would have recognized this as one of the wineries that kicked French butt in the 1976 Judgment of Paris wine tasting. We pulled off the road and went in to find just the winemaker and a cellar rat at work. No fancy tasting room back then, just boards and barrels to form a makeshift bar. They stopped what they were doing and brought out a couple of glasses. If I knew more about wine back then, I would have been in awe of the guy pouring the wine, but I was pretty much in the dark. So we tasted and talked.
I started asking my amateur questions about the wine, but pretty soon the conversation turned around. The winemaker found out that I was an economics professor. Suddenly he was very interested in talking with me. What's going to happen to interest rates? Inflation? Tax reform? He had a lot of concerns about the economy because his prestigious winery was also a business and what was happening out there in the financial markets (especially to interest rates and bank credit, as I remember) had a big impact on what he could or would do in the cellar. Wineries, especially those that specialize in fine red wines, have a lot of financial issues.
Excerpted from Wine Wars by MIKE VESETH Copyright © 2011 by Rowman & Littlefield Publishers, Inc.. Excerpted by permission of ROWMAN & LITTLEFIELD PUBLISHERS, INC.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Prelude: Grape Expectations?
1 A Tale of Two Glasses 3
2 Old Bottles, New Wine 13
Flight 1 Globalization-Blessing or Curse?
3 The DaVino Code 27
4 Missionaries, Migrants, and Market Reforms 37
5 The Masters of Wine 51
6 Curse of the Blue Nun 67
7 America's Hangover 79
Globalization Tasting 91
Flight 2 The Miracle of Two Buck Chuck
8 Martians versus Wagnerians 95
9 They Always Buy the Ten Cent Wine 109
10 Everyone's a Critic 121
11 The McWine Conspiracy 135
12 The Future of Wine in Three Bottles 149
Two Buck Chuck Tasting 161
Flight 3 Revenge of the Terroirists
13 Mondovino and the Revenge of the Terroirists 167
14 The War on Terroir 183
15 The China Syndrome 197
16 The Best of Wines or the Worst of Wines? 213
Grape Expectations Tasting 223
Selected References 239
About the Author 255
Posted April 1, 2012
No text was provided for this review.
Posted November 30, 2012
No text was provided for this review.