As some of you may know, I’m doing the Diploma program of the Wines & Spirits Education Trust (WSET) from London, UK. It’s like a Bachelor’s degree in the wine business and I’ll be focusing on this for a couple of years to come.
Weeks ago, I submitted my essay question related to the global wine market in 2012. It’s an interesting situation that may affect all of us.
If you click on this link, you’ll get a PDF copy of my report, but here are some short observations that can be made from the global situation:
- The European Community has spent buckets of cash to get producers to actually PULL their vines to create a shortage
- Complete data isn’t available as to where the money was spent, but incentives were put in place for smaller farmers over the age of 55 (ie. it was a government mandated retirement program) and I suspect that some of the larger recipients would have been international conglomerates that had the administrative resources available to get the subsidies
- Production is shifting from ‘Old World’ countries (France, Spain, Italy) to ‘New World’ countries (the US, Argentina, Chile and even China)
- Old World demand is sliding, but this decline is being more than made up for in New World regions (Asia, Africa, Russia, North America)
- Any shortage and panic about price increases will be short-lived. Quality producers may be forced to compete on price point or value proposition with bulk wine producers (even though we all know they’re two completely unique categories).
For me, the greatest epiphany I had while summing up the details was the following ‘infographic':
It’s a simple distillation of the way wine was vs the way wine is. Wine used to be all about the place and the makers promoting that place as the only place that’s good for certain grapes. Example: Burgundy. They don’t even bother telling you the grape or information about the style. As students of wine, what the French are assuming we want to know is everything about the producer, how many owners its had over the last thousand years and what kind of car they drive.
The LOCATION always influenced the grapes, or VARIETAL, that were planted. This was part historical tradition, but more importantly, practical reality. A place like Burgundy just doesn’t get enough sun and heat to cajole a Petite Sirah into maturity.
Ultimately, the STYLE of wine was dictated by both and consumers of wine had no choice but to find a way to enjoy Burgundy Pinot Noirs. Normally, this isn’t much of a challenge, but the wine was driven by the ‘How Wine Was’ chain of events.
Of course, we now know that great Pinot Noir can be made almost anywhere, including Lodi by Grady and Austria by Zantho (yes, our suppliers make fabulous Pinot Noir). Canada is making some of the best in the world, mainly because our climate is well-suited for this early ripening grape.
What the image also tells me (and I’ll translate for you) is that ‘How Wine Is’ is a chain driven by placing consumer tastes first. STYLE is the most important element in the presentation of wine. This trend has emerged over the last 50 years as the United States – now the world’s largest consumer of wine – is driving demand for wine. Even though the per capita amount is much lower than France and other European countries, the sheer volume has overwhelmed the European consumption numbers.
Most North Americans are driven by STYLE first and most wines in North America are marketed based on STYLE. Consumers typically get their first glimpse of decent wine at events like wine and food shows, places where they may or may not have an opportunity to find an appropriate food match for what they’re drinking, so they tend to start with big, full bodied wines – what I call the ‘Rubenesque Reds’ – from places like California. I suspect there’s also an element of testosterone involved. People face a lot of peer pressure when they ask for lighter, fruitier wines. There’s a perception that a lighter bodied wine isn’t ‘manly’ enough. This is, of course, one of the great tragedies of wine consumption in North America because some of the greatest wines in the world are light and fruity and do a far superior job of working with food than bigger wines do.
The point of this is that STYLE is driving demand and ultimately production of wine, so those wine companies that can keep up with the North American palate (or even influence it) will win the wine race. It’s popular to ask for VARIETAL before LOCATION, so I usually get the following request: ‘I want a full-bodied Cab from California’. No mention of producer, climate, terroir, food match or other variables related to wine studies.
With that one statement about the style requested, we’ll see the wine industry continue to reshape itself and quite likely see the emergence of counter arguments from Old World producers (if they know what’s good for them).
Many thanks and best wishes for the New Year!
London Ontario Wine Agent