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On Biodynamic Wine Tasting Days and Bad Science

Late last summer, there was a bit of a buzz around the concept of biodynamic wine tasting days. The idea is that different aspects of wine are more or less prominent on certain types of days in the biodynamic calendar than others. "Fruit" days accentuate the flavors, "flower days" can bring out aromatics, "leaf" days see wines' vegetal characteristics emphasized and "root" days result tannins that are earthy or astringent, or so the theory goes.

A book, which I shall not mention or link here, was published around then espousing this view. A number of prominent wine web sites made mention of the concept generating said buzz. [And all of the most vaguely positive comments from those mentions were swept into the online marketing campaign for the book.] Two large UK supermarket chains, Tesco and Marks & Spencer, jumped on the bandwagon, saying they had conducted (non-blind) tests and concluded that there might be something to the concept. They decided to restrict their wine tastings to days that would show wines in a favorable light. I don't believe the tests were particularly scientific, but it generated a bit of attention for the stores.

Now, the 2010 London International Wine Fair, which started yesterday and runs through tomorrow, is making a big deal about the concept on its website. "For the first time in over a decade, the show falls on the near perfect combination of tasting days in the biodynamic calendar... the Top 100 will incorporate a biodynamic tasting booklet, allowing visitors the opportunity to compare their tasting notes across the three biodynamic days. Key biodynamic exhibitors will also be organising on-stand activity to highlight the influence of the calendar." This is all on the site's homepage by the way. Well over half of that page, and virtually all of the text, is dedicated to the idea of biodynamic tasting days.

To be fair, the site does mention that some people are skeptical. And the page itself does not whole-heartedly back either the skeptics or those pushing the concept. [The emphasis is clearly on those supporting the concept.] Rather, we are invited to attend all days of the fair, look at our tasting calendars and decided for ourselves whether we taste what those who espose biodynamic tasting days say we ought. That seems even-handed but is actually totally dreadful from a scientific perspective.

The tasting not blind and people are essentially being told what they should be perceiving. In such circumstances, people overwhelmingly taste and smell what they are told they should. That is the way the human brain works. For an experiment showing this phenomenon, check out this video from Dan Ariely, the James B. Duke Professor of Behavioral Economics at Duke University. [I linked to this yesterday is well. I'm not pushing Mr. Ariely for any particular reason. However, he does excellent work and the video does a good job of illustrating my point. It's a coincidence that today's and yesterday's articles touch a bit on how perception can be manipulated by expectation. That said, buy his book. It's really good.]

Back to the LIWF. What that organization has set up is a circumstance in which a large number of people are having their perceptions colored without realizing it. The end result will likely be that a whole bunch of people are going to leave the fair convinced that the biodynamic tasting day theory has been proved true. A number of them will buy that book (the biodynamic tasting one, not the Dan Ariely one) and also tell their friends. The friends will then conduct non-scientific "experiments" at home and the cycle of bad science will continue while "knowledge" about the "truth" of biodynamic tasting spreads.

Having not conducted blind experiments in this area, nor seen the results of any such tests, I do not have a committed opinion about biodynamic tasting days one way or another. It is my nature to be skeptical so you can put me in that camp if you like. But, regardless of whether this theory, or any other, is true or not, I have great concerns about "bad" science being used to "prove"  ideas. There are already far too many people who think that truth is what they have been taught to believe, not what has been proven to be true.

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Follow NorCalWine on Twitter for breaking wine news, information on events and more. Become a fan and join the NorCal Wine community on FacebookAlso check outour comprehensive Northern California winery listings. They are very useful for planning a tasting trip or just getting in touch with a winery.

This article is original to NorCalWine.com. Copyright 2010 NorCal Wine. All rights reserved.

 

Fine Wine - Beverage or Collectible?

Most people who buy wine, fine or otherwise, do so because they enjoy drinking a glass or three with meals. Of course, some folks prefer to dispense with the meal and just have a few sips to help forget the day’s tribulations. There are also wines which are meals unto themselves. In all of these cases, however, wine bottles are being opened and the tasty contents are consumed.

For literally thousands of years, wine has been considered a beverage. Today, conscientious wineries do their utmost to ensure fruit is at an ideal state when harvested. Winemakers either minimize their involvement to maximize expression of the fruit or employ their technical skills and spicy barrels to make wine in a style their customers will love.

Despite all of this, there are people who don’t think of wine as nectar of the gods. Instead, it’s a status symbol, an opportunity to diversify their portfolio, or both. This is not a new phenomenon but it has, in my opinion, gotten out of hand now. Covetous acquisition and speculative hoarding by people with loads of disposable cash has driven the price of many wines to ridiculous levels — levels that put these wines well past the point at which a wine enthusiast can buy them to drink or investors might reasonably expect good returns.

Yesterday, Tom Johnson quoted a money manager who used to buy wine as an investment, but now finds the valuations too high. He is not alone. Collectible wines, especially First Growth Bordeaux and DRC Burgundy, are realizing much higher prices in Asia than Europe or the United States. In the West, the recession has not only constricted income and hurt returns on other investments, it has reminded some people that the value of one's stock, house or wine cannot rise indefinitely.

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For years, people who invested in “blue chip” wines, essentially Bordeaux First Growths, have been rewarded with handsome increases in value over time. The Liv-Ex 100 Fine Wine Index, the most prominent benchmark for tracking the value of investment grade wines, has tripled over the past five years. More than 90% of the wines followed by that index are red Bordeaux. Much of that increase has been driven by less than 50 wines. The meteoric rise has been going on since 1994 with 12x growth from then until now. Is that type of growth sustainable?

Most of the growth has come during two fairly short periods of time. From 1988 through 1993, the index was virtually flat. Between January 1994 and January of 1998, there was a 400% increase. That was followed by a correction which saw a quarter of the value erased, a recovery over 30 months and then flat values until January 2006. Between 2006 and today, values have nearly tripled, overcoming a steep but short-lived correction during the worst of the financial crisis. The growth seems driven by periods of what Alan Greenspan has called "irrational exuberance" and by the increasing concentration of wealth among smaller and smaller segments of the population.

Stock valuations are driven based by company performance: revenue, growth, profit. As companies add new products and increase sales volume, stock prices go up. Investing in wine is more like investing in commodities, the prices are driven in part by demand and scarcity of supply. But, unlike most investment commodities such as corn and lean hogs, investment wines aren’t “used” on a routine basis nor are their prices moderated by the need to keep them affordable to billions of “normal” consumers. Unlike oil and gold, wine is a renewable resource. Unlike houses, it provides no shelter. Unlike diamonds, wine does not last forever. Like other investments gone wild, wine prices are going up now simply because of recent increases and the belief that it will continue to do so. Cough. Tulip bulbs. Cough.

In the beginning, wine’s investment value was based not just on scarcity and brand reputation but on the desirability of the wine as a beverage. The best investments have been top Bordeaux from great years. They are wines that  improve with extended age and which also offer historical interest. There was a “gold standard” for the wines in that, eventually, the person who wound up with them at the end would drink them and find the experience pleasurable. Because those wines have shown the greatest historical appreciation, they remain the most sought after by investors. But the backup plan, drinking, is no longer viable.

There are certainly people who can afford to pay thousands of dollars for a single of bottle of wine to drink. There are also people who can pay $19,000 a night for a hotel room. But the number of such people is low and the amount of wine available increases every year. And how many of those bottles would they be willing to drink? Due to improvements in viticultural and winemaking techniques, the frequency of great, and thus theoretically investment-grade, vintages is increasing too. There have already been three “vintages of the century,” as 2000, 2005 and 2009 have been declared by pundits, and we’re only ten years in. Perhaps someone is working on a 110-point system for grading wines. Why would a reasonable person pay more for 100-point wine from 2009 than they would for such a wine from 2000? Tom Johnson also has a brief piece about the risks Bordeaux is taking with their 2009 pricing. It is, perhaps, especially dangerous given the grave concerns about en primeur just a year ago.

Nonetheless, those who pitch wine as investment and make money through consulting fees or by selling their own inventory are still beating the drum. Consider these comments from Paul Fraser Collectibles, “a new expo this month will show why investible fine wines offer great return for minimal risk.” Has the financial crisis not taught us that there is no such thing as “great return for minimal risk?”

He hints at where the market for these special wines has gone, “The most covetable objects in the world.” These wines are baubles, not beverages. Other items featured on his home page include an auction of “archaic and rare Chinese bronzes” and realized auction prices for the “first ever” Cadillac and a “full slice of Moon rock.” Wine has come to this.

One of the participants in the Masterpiece London show, which will be featuring the collectible wines about which Fraser enthused, is wine merchant Bordeaux Index. They seem to realize what’s going on but, rather than talk people off the ledge, want to assure the punters that there’s still stuff to drink. “Although prices for the very top “blue chip” wines have reached the stratosphere, there are still countless examples of wines to drink that offer exceptional value,” says director Andrew Bruce. Come ogle the Ferraris but don't forget we’ve got Kia out back.

In the frenzy to hype increased auction prices of wine, even auction houses are getting sloppy. In a news release, Christie’s trumpeted the sale of 6 bottles of 1961 Hermitage La Chapelle in May for $98,951 "a new world auction record per bottle." Under the impression this was a record for wine in general, several news outlets picked up the story and it was a big headline for a few days. The sale was heralded as another sign of economic recovery and as fodder for wine as an investment. Sadly, the claim pertained only to that specific wine. I called Christie’s on it. Literally. And, after 3 weeks, rather than issuing a retraction, they simply changed their realized prices sheet to clarify that it was the highest price ever for Hermitage La Chapelle. So, several million people saw the incorrect statement and, maybe, fifteen — plus my faithful readers — will see the correction. The original press release is unchanged on their site. In fairness, it was an exciting price. Almost twice as much per bottle as for that slice of Moon rock!

LunarMeteorite

What harm does all this speculation do? In the end, if a bunch of rich guys lose money on wine, it won’t have much of an impact on you or me. It’s probably been years since we’ve been able to buy a bottle of Chateau Petrus to drink, if we ever could. Inaccessible times ten is still inaccessible. [As I write, I've received a solicitation trumpeting 2008 Chateau Petrus as a bargain at $2,500 per bottle! Better to spend money on this, no need to worry about it being corked and you can keep it in plain sight.] Filling a cellar with wine because it’s a checkmark item in the “how to fit in with rich people guide book” is obnoxious, but not any more so than a lot of the other extravagant expenditures that go with such a lifestyle.

I have three main objections. First, with all of the hype about wine as investment, there will be people who buy in yet cannot afford to lose money. They will very likely get hurt. Second, the prices of the “investment grade” wines are used as justification for increasing the price of others. That artificially escalates the cost of good wines everywhere. It also gives some winery owners unrealistic revenue expectations leading them to make unwise decisions about expansion, renovations, etc. Finally, it’s a shame that so many of the world’s best wines will never be tasted in their prime. They were made to be enjoyed.

If you enjoyed this article, please share it! Icons for popular sharing services are at the right above and also below.

Follow NorCalWine on Twitter for breaking wine news, information on events and more. Become a fan and join the NorCal Wine community on FacebookAlso check outour comprehensive Northern California winery listings. They are very useful for planning a tasting trip or just getting in touch with a winery.

This article is original to NorCalWine.com. Copyright 2010 NorCal Wine. All rights reserved. Moon rock photo displayed at Paul Fraser Collectibles without attribution. Housing bubble chart attributed to http://housingbubble.jparsons.net.

Google Gets into the Wine Club Business

a_toast_with_red_wineReally. They are. Well, kind of. You may be aware that the tiny internet startup called Google purchased ZAGAT earlier this month. ZAGAT, which calls itself “the most trusted source for restaurant reviews,” now wants to be your most trusted source for wine. I know this because my email inbox told me today that ZAGAT has started a “wine club.”

It’s a club in the sense that you and a bunch of other people you’ve never met and may having nothing in common with, other than the willingness to spend $150 four times per year on wine that you didn’t choose, will be doing just that simultaneously but separately. So, it’s a club for people who trust ZAGATs trust in Tony Laithwaite who has been hired to choose the wine. And if Google trusts ZAGAT to trust Tony, shouldn’t you? My UrbanDaddy told me to. There’s no word on a t-shirt or secret handshake.

Here’s the landing page for ZAGATWine, via UrbanDaddy. It has more info on the “club” which I neither encourage nor discourage (well, maybe a little) you to join. My take on deals like this is that they may, or may not, offer some good values. But the person (okay, the Tony) choosing the wines doesn’t know anything about the most important person in the operation — you.

Tony Laithewaite (Google him.) is no lightweight when it comes to wine. But only giving you a choice between red, white or mixed cases doesn’t really help him suit your taste. It’s like going to a restaurant where you know nothing about the cuisine and being told your only choice is between hot food or cold. Everything else will be decided for you by the kitchen. How would ZAGAT would rate that restaurant?

To it's credit, ZAGATWine does let you see, in advance of shipment, what you'll be getting. "You're free to delay delivery, skip cases or cancel at any time."

Winery clubs make a lot more sense to me. You know who is making the wine, the range of things they offer and can taste some of the wines in advance. Another option is to go to your favorite wine shop and ask them to put together a mixed case of wines you’ve never tried, but based on your personal preferences. You can tell them what you like if they don’t already know. (If you don’t have a favorite wine shop, you should really fix that.)

What wine have you tried lately for the first time and really, really liked? I’m salivating over 2002 Coeur de Cuvee from Vilmart & Cie, a vintage Champagne.

Follow NorCalWine on Twitter for breaking wine news, information on events and more. Become a fan and join the NorCal Wine community on FacebookAlso check out our comprehensive Northern California winery listings. They are very useful for planning a tasting trip or just getting in touch with a winery.

This article is original to NorCalWine.com. Copyright 2011 NorCal Wine. Photo by webphotographeer. All rights reserved.

Authenticity or 100 Point Scores, Matt Kramer or Steve Heimoff, Chicken or Egg

In his blog of October 5, Matt Kramer described how he now perceives the vast changes that have occurred in the world’s wines over the past 40 years. While changes in specific wines are obvious to even casual drinkers, and some broader trends have been equally obvious, Kramer notes that only now, in the wake of research for his new book and numerous conversations with wine industry professionals around the world, has he been able to put his finger on the driving force of most of these changes. In a new blog from October 19, he identifies the cause as the pursuit of authenticity; the attempt to ensure that the wine in a bottle is a) what the label says it is and b) a wine that represents both its constituent grapes and the place from whence they came in a way that allows them to be identified by a trained taster.

What are the changes of which he writes? He notes dramatic stylistic changes in the wines of Bordeaux and Burgundy toward richer, oakier products. He alludes to similar changes in California. As for places such as Italy and Spain, while he’s too kind to say so directly, the changes he speaks of are the transformation from poorly made, often unclean, wine to good and, yes, site specific wine.

Few people would assert that these changes have not taken place or that they are not significant. What is being hotly debated now is the cause. Again, Kramer says the change-factor is the search for authenticity. He actively dismisses the notion that the 100-point scoring system is the root cause, saying that higher scores are just a by-product of the authenticity-driven changes. Others, including Steve Heimoff in his blog today, argued the contrary. Heimoff states “From my perspective in California, I know that the 100-point system has been responsible for almost all the changes that have occurred.” He cites as proof 20 years of comments from California winemakers indicating that they have been changing their style in pursuit of higher scores.

I think both Mr. Kramer and Mr. Heimoff are incorrect. The pursuit of authenticity and the pursuit of scores are simply tools. The real compulsion for all of these changes is the desire of wineries to profit from, or at least survive in, an increasingly global wine market.

In a market that is not global — a market in which wines rarely go far beyond their region of origin or, if they do, are typically the primary wine available in that export market — consumers have little choice. It is not one market but scads of tiny regional monopolies. If consumers want wine, they have to drink “local.” These consumers are relatively insensitive to poor quality because they are accustomed to the local wine, even if it is bad, and because they don’t have access to significantly different wine. On the winemaking side, captive markets and limited competition do not inspire innovation or the pursuit of higher quality.

The beginning of this change, I believe, came with the end of World War II. Many American GIs returned home from Europe with a newly acquired taste for wine — mostly French and Italian wine. However, authentically French or Italian wines weren’t broadly available in the U.S. outside of the biggest cities. So American wineries began producing volumes of “Hearty Burgundy” and “Chablis” made from domestic grapes that rarely had anything in common with Pinot Noir or Chardonnay. [Certainly, the use of such names in the U.S. pre-dated WWII. However, volumes were lower and the wines were often produced by first- or second-generation immigrants who were at least taking a stab at reproducing the wines of their homelands for themselves and their fellow immigrants.]

In the 1960’s, a number of things occurred which started to push the globalization of wine into high gear. The post-war economies of the major European countries began to improve and businesses therein transitioned from survival mode to a quest for expansion. Air travel became safer and much more prevalent; flights from the U.S. to Europe were no longer just for the rich and famous. In the United States, Robert Mondavi, to whom the best wines of Europe were well-known, founded a winery in Napa Valley with the goal of producing wines from that region that would be as good as the best of Bordeaux. European wine professionals came to California to study more modern approaches to viticulture and vinification. (Christian Moueix, proprietor of Chateau Petrus, studied at U.C. Davis in 1968-69.) In short, European wine regions were ready to increase exports, there was an increasing number of consumers eager to buy those wines and the seeds of global competition had been sown.

These trends did nothing but accelerate in the 1970’s. International travel became common and international cargo (eg. wine) transport improved. More wineries sprouted up in California, focused on satisfying increasing domestic demand for quality wines in a European style. Robert Mondavi expanded his focus to Italy. European wineries took interest in owning vineyards in California. And, in 1976, California took the top spots in The Judgement of Paris. While the latter event was publicly discounted by the French at the time — even the judges made excuses — behind closed doors it had to provide a very loud wake-up call to French wineries.

In subsequent years, more and more markets opened up and more regions began producing high-quality wine in pursuit of those customers. Australia was among the first, as getting to and from became easier. Political changes and economic development allowed Italy, Spain, Latin America and South Africa to enter the world market in a serious way. Today, even Bulgaria plays a significant role at low price points in Europe.

Where does authenticity come in? Globalization is both opportunity and threat. Claiming authenticity — a genuine sense of unique place — is both offense and defense. When the market for wines such as genuine Chablis is threatened by foreigners making use of the name, the rightful owners of that “brand” defend it. They pursue international legislation to stop such usage. In order to further legitimize their claim and develop the brand, these regions also pass their own laws regulating typicity and minimum quality standards.

But, if California can produce high-quality wines in the “Bordeaux-style,” merely preventing its wineries from calling the wine Claret is insufficient to hold, let alone grow, market share. Wines must have a unique selling proposition. It’s not enough to be Bordeaux. To do that, wineries must play up the differences between Left Bank and Right, St. Julien and Pauillac, Mouton and Lafite. The flavor, and certainly the romance, of a single site is much harder to reproduce elsewhere than is a broad regional style. The same thing has occurred in the New World. It was not enough to make a Cabernet Sauvignon-blend or to license the term “Meritage” in hope of evoking thoughts of Bordeaux. Al Brounstein founded Diamond Creek in 1968 and proved you can thrive by designating single-vineyards if you truly capture the character of said vineyard in the bottle — assuming that it is worth capturing. Hundreds, probably thousands, of wineries have followed his example.

Unique authenticity can create fans among consumers and deliver both good unit sales and higher prices. It creates a sense of exclusivity, implies limited supply, and inspires romantic notions regarding history, geography and agriculture. It allows for a broader line list of clearly differentiated products. Authenticity allows character to triumph over yum-factor. And it allows wineries to argue that the one thing that is theirs alone - their vineyard land - is not just unique but superior to that of their competitors.

As Matt Kramer says one of the key changes he's seen is richer wines and that can be a by-product of the pursuit of authenticity. However, that isn't always the case. Not every wine which has become richer and oakier has done so due to the pursuit of authenticity. Sometimes wineries are simply pursuing richer wines to suit their perception of consumers' or reviewers' tastes.

Enter the 100-point system. The average consumer cannot hope to taste, let alone carefully evaluate, the profusion of wines to which globalization and the resulting site-specific designations have led. Consumers freeze up when confronted with too much choice absent guidance. The “old-school” style of wine writing was not capable of providing sufficient advice. That is not to say anything is wrong with that writing. The style simply takes too much time to research, and too many words, to address consumers’ basic questions about the thousands of available wines in any given market. Consumers want to know whether or not a wine is “good,” what it tastes like, and whether or not they will like it. The 100-point scoring system, along with a capsule description, aims to answer the first two questions and can do so for a huge number of wines. The system is imperfect but consumers obviously find it attractive. As a result, the 100-point system has changed the way consumers, stores and restaurants around the world make their buying decisions.

As a result, many wineries pursue high scores in an effort to thrive in an increasingly competitive global market. Consumers want high-scoring wines because they are thought to be good. The trade want high-scoring wines because consumers buy them readily. And if high-scores are meant to connote quality, then pursuing those scores is a pursuit not only of sales but improved quality. Whether or not you or I agree with the scores of a particular reviewer is irrelevant. Reviews and the pursuit of points is simply another tool that wineries use, along with authenticity, use of an "international style," wine clubs, fancy tasting rooms, advertising, and now social media, to try to succeed in a competitive global market.

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Follow NorCalWine on Twitter for breaking wine news, information on events and more. Become a fan and join the NorCal Wine community on FacebookAlso check out our comprehensive Northern California winery listings. They are very useful for planning a tasting trip or just getting in touch with a winery.

This article is original to NorCalWine.com. Copyright 2010 NorCal Wine. All rights reserved.

Store-Brand Wine and Beer Sales on the Rise

According to market research firm IBISWorld senior analyst Steven Connell, Australian consumers are lapping up private label wines from big retailers Coles and Woolworths (the leading retailer in Australia). IBISWorld projects that 10% of Australia's domestic wine sales will be own-brand by 2013.

While I don't doubt his numbers, and this trend mirrors that of other products globally — from groceries to video game accessories — I don't completely buy his verbal analysis: "Drinkers have more choice and a more cultured taste. They will try more products and are more sensitive to price."

More choice; yes. Try more products; perhaps. More sensitive to price; undoubtedly. More cultured taste? That's debatable. Certainly, even here in the United States, at stores such as Trader Joe's, we see consumers buying private label bottles that hold excellent wines which have been sold to the store due to excess production. The private label deals allow wineries to get some cash for wine they can't sell at traditional retail prices due to the econony — and they can do so without hurting the wineries' own brands through drastic disounting. But, by and large, these bottles are selling because of price and the trust that consumers have in Trader Joe's selections, not because the consumers' "cultured taste" somehow divined that the mystery wine was going to be excellent.

Trader_Joes_Coastal_Cabernet_Sauvignon

I'm not dissing consumers, but the purchasing habits of various consumer segments are fairly consistent. Price shoppers shop price. While quality is of some concern to them, these consumers are sensitive to very small increments in price. They are also much less loyal to brands, in part because their previous buying decisions have also been based on price rather than brand. Clearly, if they try a new wine based on price and decide that it's complete swill, they won't buy more. But, they will very likely accept a somewhat lower level of quality in exchange for a dollar or two of savings. And, frankly, these consumers have become very accustomed to sweet, uncomplicated wines and would likely prefer those to higher-quality wines with unusual flavors or perceptible tannins. Woolworth's say that their own-brand wines are undercutting those of comparable quality by up to $5. That is a huge and motivating price delta in a product segment that tops out at roughly $15. Fortunately for these consumers, and for the stores, it's easier than ever before to create boring, yet friendly, fruit-centric wines at very low cost. [via Herald Sun]

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Follow NorCalWine on Twitter for breaking wine news, information on events and more. Become a fan and join the NorCal Wine community on Facebook. Also check outour comprehensive Northern California winery listings. They are very useful for planning a tasting trip or just getting in touch with a winery.

This article is original to NorCalWine.com. Photos by Fred Swan. Copyright 2010 NorCal Wine. All rights reserved. Photo by Joe.