Meininger’s Wine Business International - issue 01/2017 by MEININGER VERLAG GmbH

Volume XII · Issue 1 · February 2017

22 €

M E I N I N G E R’S

WINE BUSINESS INTERNATIONAL

INSIDE THE SILICON VALLEY BANK

HOW TO TELL A GOOD WINE STORY

100 YEARS OF WINE IN FINLAND

An interview with Rob McMillan, founder of the Silicon Valley Bank’s wine division. He discusses what’s happening economically in the US wine market. Page 30

New research has uncovered what will make consumers remember a good wine story — and what makes a wine story forgettable. Page 18

An insider’s look at this monopolydominant market in the coldest country in Scandinavia, including trends in both on- and off-trade. Page 22

RED WINES AGAINST WHITE

SACRED GROUND IN BURGUNDY

Why do red wines always score higher in competitions? Is it because red wines are more complex — or is there bias at work? Page 50

Sascha Speicher visits Domaine de la Romanée-Conti, the winery which produces some of the world’s most sought-after wines. Page 82

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EDITORIAL

ONE MAGAZINE. THE WHOLE WORLD OF WINE.

BY FELICITY CARTER

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e live, as the old curse goes, in interesting times. Between populist unrest and dramatic political changes in key markets, it’s hard to make economic predictions. Some things are clear. The precipitous fall in the pound means that the UK market, which had already become a tough place to do business, is getting tougher. The major retailers are, apparently, trying to keep their prices the same, which means they’re asking their suppliers to cut their margins and supply the same wines at a lower cost. This may be a very unwise strategy for producers to follow. The pound will, one day, bounce upwards again, and when it does, there will be no negotiating room. Retailers will have learned that wineries can continue to supply wines at lower and lower prices, so they won’t want to return to the prices they used to pay. For many producers, the great hope has always been the US market, where margins can be a lot more comfortable. Unfortunately, there are signs that even there, things are going to get tougher. As Jeff Siegel reports, the great wine boom of the past couple of decades may be slowing to a halt. This doesn’t mean consumers will stop drinking wine, just that new wines entering the country will have to compete harder with the wines already on the shelves. The silver lining is that there are still vast sections of the country that are still to become part of the wine culture, and they may be the right places to head for, rather than the big coastal cities. E AT E BADG EE TRAD ersWBI UR FRtackling ing sustainability, Late last year I visited South Africa to look atGhow ein ET YOit’s /M om ly.c www.vinita and I came away deeply impressed with what I saw. In the first of several stories, I have recorded what I saw on my visit to Spier Wine Farm. 17 a 20It’s 12 A PR IL NA 9 ER OVirginia, Vin farm modelled on Joel Salatin’s famous Polyface Farm where the N IO IT 51 ^ ED plants and animals are managed in such a way that they help each other’s growth and well-being. It’s not the only wine producer in the world to follow this model – a number of South Africans are also working to solve their pest problems by bringing in beneficial animals and insects, as are producers elsewhere. But this type of enterprise is probably the true future of wine – a return to mixed farming, simply because it may be a better way to farm. The old mixed farms of our ancestors disappeared because they didn’t produce enough of one crop to be financially viable, but in a world where consumers are literally hungering for authenticity in their food, the pricing might finally 51 be right. There’s plenty more in this extra-large ProWein issue, including a look9 12 inside the fabled Domaine de la Romanée-Conti and an in-depth interview with Rob McMillan, founder of Silicon Valley Bank’s Wine Division.

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Six times a year. Available on iOS and Android. www.wine-business-international.com

1/17 MEININGER’S WBI

CONTENTS

NEWS ANALYSIS 6 A Chinese tax scheme by Oliver Zhou

A way around a punishing wine tax.

8 Could the good times be over? by Jeff Siegel

A look at the US wine boom. 22

10 Where there's a will, there's a fake

Helsinki, Finland

The counterfeiting of wine.

by Adam Lechmere

48 Is exporting always a good strategy? Sometimes, it's possible to lose money. by Michael Fridjhon

50 The white wine trap by Jeff Siegel

Why do red wines always score higher?

78 A new approach to an old problem Reduced-calorie wines are nothing new. by Rebecca Gibb MW

The tasting room at Spier Wine Farm, South Africa

88 Celebrating Australia Day A good mood at the London tasting.

REGULARS

by Felicity Carter

MARKET WATCH

3 Editorial 12 Perspectives

22 100 years of wine in Finland A look at how the Finnish market operates.

89 Masthead

by Ilkka Sirén

POWER LIST

90 Column by Robert Joseph 90 Next issue

36 Top UK distributors In a market full of major distributors, Adam Lechmere bravely identifies some leading companies. by Adam Lechmere

OUR WRITERS IN THIS ISSUE

INTERVIEW 30 The analyst

Sascha Speicher is editor-in-chief of Sommelier magazine, published by Meininger Verlag.

An in-depth conversation with Rob McMillan, CEO of the Silicon Valley Bank. by Robert Joseph

34 Silicon Valley statistics A snapshot of the US market. Felicity Carter, Germany Michael Fridjhon, South Africa Rebecca Gibb MW, UK Dr Jamie Goode, UK Robert Joseph, UK James Lawrence, UK

Adam Lechmere, UK Jeff Siegel, USA Oliver Zhou, China Ilkka Sirén, Finland Elisabetta Tosi, Italy

TECHNOLOGY 64 A revolution in closures A visit to Vinventions.

by Felicity Carter

18 The art of wine storytelling New research has uncovered the best way to tell a story that sticks in the mind. by Felicity Carter

86 Wine heads to the party by Robert Joseph

The Sula wine festival in India.

Maureen Downey

Didier Thibaud, Carrefour

Rajeev Samant, Sula

FAIRS & CONFERENCES 14 ProWein and Vinitaly Two must-attend fairs.

WHO IS WHO

16 A summation of wine

38 Who is Who in France

An overview of what was discussed at the 2016 Wine Vision conference, plus the Trailblazers. by Robert Joseph

REGIONAL ANALYSIS

COMPANY PROFILE

42 In the pink

54 The many faces of Spier

52 Rescuing old vines

80 A deep-rooted love of wine

South Africa goes looking for heritage.

Allegrini Vini is in the heart of Valpolicella. by Elisabetta Tosi

Inside Domaine de la Romanée-Conti, one of the greatest wineries in the world. by Sascha Speicher

21/04/2011

16:23

by Felicity Carter

58 New Zealand’s red secret The taste of Hawke’s Bay.

82 Sacred ground in Burgundy

by Dr Jamie Goode

Provence rosés are booming. by Felicity Carter

Could this be viticulture’s future?

divici_advert_winebusiness_215x95.pdf

by Robert Joseph

The leaders in significant categories.

by Rebecca Gibb MW

70 Chablis steels itself Will a small harvest mean high prices? by Adam Lechmere

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MARKETING

N E W S A N A LY S I S CHINA

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A NEW TAX SCHEME IN CHINA Normally, wines exported to China are slapped with a 48.2% tax. A new scheme, however, is less than half of that. Oliver Zhou explains.

ny producer who wants to enter the Chinese market knows about the painful ‘tax thing’. Before sending any bottle to China, 48.2% tax – which includes VAT, sales tax and tariff – must be paid to the government, unless the producer happens to be one of the few lucky ones from either Oceania or Chile. Thanks to free trade agreements, wines from Chile and New Zealand currently enjoy zero tariff, a benefit Australian wines are expected to enjoy by 2019. Some very interesting things are happening to distribution in China, however, and happening fast. Many retailers in China are now experimenting with a new scheme that allows them to sell imported wine subject to a 21% tax instead of the usual 48.2%. This is not by smuggling or parallel importation, but by utilising a government-sanctioned ‘cross-border scheme’.

Another way to import People who are not familiar with China may not be aware of the enthusiasm Chinese consumers have for overseas goods, whether it’s milk powder from Australia and New Zealand, health supplements from the US, or luxury bags and shoes from France and Italy. It is estimated that during 2016, 900bn RMB ($130bn) was spent by Chinese consumers on ‘overseas purchasing’, a 38.5% increase on 2015. In light of this, the Chinese government launched a new

initiative called ‘Cross-Border E-Commerce’, which targets Chinese consumers buying directly from foreign producers or retailers. The latest version of this scheme, ‘The circular of the Customs Tariff Commission of the State Council on issues pertaining to the adjustment of import tax for imported articles’, came into effect on 8 April 2016. This regulation is effectively a ‘white list’ for goods eligible for this scheme. According to the list, all still wine in packaging of under 2 L qualifies, which rules out any wine in larger-than-magnum-sized bottles and all sparkling wines. Stated simply, 21% overall tax need to be paid on the retail price of the wine rather than the normal 48.2% on the cost, insurance and freight (CIF) cost. This policy was supposed to be revised again on 8 April 2017, but no major change is expected until the end of 2017 according to industry professionals. Cross-border e-commerce is not a recent practice for other products, but its use for wine is novel. Indeed, most dedicated retailing platforms specialising in cross-border e-commerce for wine are only a couple months old. More comprehensive retail platforms such as JD.hk, Tmall.com and Kaola.com have been operating for a little longer. Most platforms focus on Grand Cru Classé wines from Bordeaux, while morespecialised ones may work with some Burgundy and Australian wine. For example, JD.hk offered a bottle of 2007 Château Coutet at $45.65 including tax – significantly less than the $58.00 that Wine-Searcher suggests as an average global price.

PICTURE: LISHENG2121 - FOTOLIA.COM

The catch

China’s major ports

There is quite a long list of catches. First, the amount of money anyone can spend on cross-border goods is limited to 2,000RMB for a single order, and an annual total of 20,000RMB for any individual. This ceiling enables these platforms to distribute premium – but maybe not ultra-premium – wines. Also, the 21% is based on the retail price of the

wine instead of on the CIF tax. Profit margins today in China are far less handsome than they were during the boom years of 2008 to 2010, and basing a tax on a retail price effectively sets another limit on the maximum margin retailers can earn. Most set a gross margin of between 5% to 40%, depending on the wine. It is also worth noting that, unlike the bottles on retail shelves, wines sold in this way do not come with Chinese government-imposed back labels. This means that anyone wanting to take advantage of China’s secondary market for wine would be prohibited from selling them. One undeniable advantage of the cross-border scheme is the need for less documentation. Although in practice, the officials in one port may apply different rules than those in another, and the only documents a producer needs are the ‘Certificate of Origin’ and ‘Sanitary Certificate’ prior to collection of the wine, and a ‘Certificate of Bottling’ for custom clearance. In the real world, exploiting the cross-border scheme for direct-to-consumer wine sales is slightly more complicated than this, and models for other products also differ. However, it is possible for the entire process – from the collection of the wine from the producer to the moment the consumer receives the bottle – can be handled in around three weeks provided the shipment is done by air.

How it works 1. The distributor in China places an order and agrees payment terms, and arranges the collection of the wine and the required documentation. 2. The wines are shipped to the Chinese port eligible for cross-border e-commerce, using ocean or air freight. 3. The cross-border warehouse receives and records the wines. 4. The distributor starts to sell the wines and take orders. Once payment is confirmed from the consumer, the order and payment information are transferred to the customs agent equipped to handle cross-border

e-commerce and the customs office. 5. The customs officers vet the payment information to verify whether it exceeds the buyer’s annual limit. 6. The agent notifies the cross-border warehouse to arrange the simultaneous shipping and custom clearance of the wine. At this point there is another possible catch. There is a very small chance (no more than 2%, even in extreme cases) the wine may be chosen for inspection by the customs officer, which could delay delivery for several days. 7. The consumer receives the bottle(s). At the moment, some distributors – including a few from Shenzhen – hold stock in Hong Kong, and it would not be surprising if others followed suit. But given the fact that Hong Kong and more than 10 Chinese ports all share the same tax-free status, there is no reason to favour the former British colony. At present, Ningbo, Shenzhen and Tianjin are among the most popular of these ports, and each has several cross-border e-commerce customs agents. As one in Ningbo says, “This port offers the best policy, and that’s why a lot of our clients, including Tmall, JD, Kaola, choose to work with us.” It needs to be noted that upon arriving at the port, the goods are stored in a specialised facility called a ‘cross-border warehouse’, which is closely monitored by the Chinese customs office. According to the regulations, goods, once received into the warehouse, can be transferred to a regular storage facility if the importer decides not to sell them directly to the consumer. The reverse, however, is not allowed. In other words, if a distributor is unable to sell the wine using the cross-border scheme, they can still opt for a traditional retail route to market. To do so, would, of course, incur the higher tax rate.

The cost Although shipment by sea remains a strong option, many distributors will choose air freight. Normally, for shipments of over 300 bottles, this method of shipping would cost around 30RMB per bottle compared to as little as 2RMB per bottle shipped by boat. Inevitably, this has implications for the kinds of wine that will be appropriate for this route to market. It probably wouldn’t be worth a distributor shipping a wine with an ex-cellar price below $23.50 per bottle for sale through cross-border e-commerce. Bottles with a lower price will need to be shipped by sea. As for the priciest wine that could be sold in this way, even if the distributor were to work with a zero gross margin, the most they could pay without the consumer exceeding the 2,000RMB per order limit would be around $223.00. At this point, producers reading this must be wondering how they can participate in this programme. Who should they talk to? What kind of wine should they offer to consumers? Would this be a good option for expensive-but-slowing-moving bottles? Price isn’t everything. There are a number of factors that explain why a certain wine is popular or not. Mindlessly pushing all the expensive or slow-moving ones is not going to work. Talk to your importer, choose the right product that offers a good discount compared to the normal import price, and choose the kind of product that doesn’t affect the pricing structure of the entire brand. Overseas fine wine retailers can also take advantage of this programme given that they have all the documents on hand. W

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N E W S A N A LY S I S US WINE BOOM

COULD THE GOOD TIMES BE OVER? Producers around the world look at the US market as the place to be. Beware, says Jeff Siegel, because the indications are that the long wine boom is coming to a close.

several wine industry analysts who have hat if the 40-year-long US wine boom, parsed the numbers, as well as an influential which increased wine consumption study, say it’s more likely than not. “If you look threefold and turned that country at the numbers, you could say that this started into the world’s biggest wine market, is over? before the recession,” says Jon Moramarco, Some fakes are easy to spot: the managing partner for the BW 166 consultancy. photocopied label that says Panfaids instead “In this, you could also say that wine in the of Penfolds, or Popus One instead of Opus US has been a somewhat mature One. Many more, though, are market for a while now.” works of art in themselves. In Sour Grapes, the brilliant documentary about Kurniawan’s Steady growth fall, his former friends (all of whom he was defrauding) pay In the early 1970s, the US was tribute to the skill with which a minor wine-drinking country, he recreated bottles. Label paper where average consumption was was aged by baking or with tea, about 4% of that in France. By tobacco or shellac, corks were the beginning of the recession stamped, ink was sourced to be 40 years later, that ratio had as authentic as possible, wooden “The first thing we improved to 25%, and consumers cases were stencilled. in the US drank more wine than tell our clients is, And what if the end of ‘Your wine isn’t anyone else – one of every eight the wine boom means US special.’ If you’re bottles produced in the world. consumption grows only as much going to sell a That growth was powered by as the increase in the country’s $40.00 wine, it has California’s improvements in drinking-age population, about to offer $40.00 quality and marketing, starting 1% a year? with the fighting varietal worth of value, What if the days of annual and not just cost movement in the 1970s; 5% to 10% growth in the US $40.00 because the discovery of the French never return, given an aging you think it should paradox in the 1990s; and the population and increased cost $40.00.” liberalisation of the US retail competition from craft beer and market, including the end of Paul Tincknell, spirits? state dry laws over the past two Tincknell & Tincknell What if prices remain flat, decades. It was the golden age since more and more wines of US wine for both producers will be chasing the same number of wine and consumers, and the perception was that drinkers? And what if consolidation among the US market would make everyone rich and retailers, distributors and producers make it happy forever. Before the recession, a Gallup more difficult for all but the biggest producers poll found that wine had replaced beer as the to make an impact on those overwhelmed US consumers’ drink of choice, something that consumers? was almost unprecedented. But not anymore, given the slowdown in US growth. In one respect, this seems Wonder no more contradictory. There are more wineries in the US than ever – almost 11,000, twice as many The slowdown in US consumption could as in 2006. In Washington state, which has well be underway, having started during the the second-most wineries after California, “we recession. And if no one can say for certain continue to see steady growth, and we don’t if or when the rest of this scenario will occur,

have any indication that this growth may be slowing,” says Steve Warner, president of the Washington State Wine Commission. That includes a 50% increase in vineyard plantings from 36,000 acres (14,560 ha) in 2009 to more than 54,000 acres in 2016. In addition, the value of the wine sold in the US, as measured in dollars, continues to grow more than the volume of wine sold. The value has grown 25% since the recession started in 2007, compared to 21% for volume. This is premiumisation, in which US wine drinkers have moved from wines costing less than $7.00 a bottle to those costing between $7.00 and $15.00. But that doesn’t change what a study from Wine Intelligence in London calls a significant change in US consumption: “The US has been showing a steady annual volume growth rate of 1% for the past five years. With a consumption rate of just over 12 L per adult per year and 60% of US adults currently abstaining from wine, it has long been thought of as a market with significant growth potential. … Two measures suggest that the US market for wine may have peaked – or at least paused. There has been a reduction in the average consumption per head of wine in the last few years, coupled with a reduction in the number of very frequent wine drinkers – that is, those drinking wine on a near daily basis.”

The end of an era Not every analyst agrees about the reduction in the number of most-frequent wine drinkers, though that may be because different studies measure frequency in different ways. In addition, some analysts foresee the possibility that the number of high-frequency drinkers could increase, making up the difference. But there is no doubt per capita consumption has been flat since 2012. “What you’re seeing is flat to slowly down in the number of occasional wine drinkers,” says Christian Miller, the proprietor of San Francisco Bay Area’s Full Glass Research, which provides economic and market analysis and research for food and

though nothing definite, that the younger demographics may be drinking less overall than the Boomers did at the same age. In this, says Moramarco, wine’s foreseeable future is not about continued growth but a battle for market share with beer and spirits, especially since the size of the overall alcohol market may also grow only as much as the drinking-age population. But that’s not his most sobering statistic. Consider, he says, that there are about 125,000 wine SKUs on US shelves in any one year, but that the high-frequency wine drinker buys only about 75 bottles a year.

The brave new world The formula for European sales in the US during the boom seemed simple – find an exporter who could navigate the US three-tier system, and the money would flow in. Which, of course, wasn’t quite the case. But 40 years of continuous growth tended to gild the lily. “One of the most difficult things about working with European producers is educating them about the US market,” says Tincknell. “And it’s not just about the legal issues. They need to understand the differences in the US market, and that one size doesn’t fit all.” So how do producers adjust to this new landscape? The first thing to do, says Tincknell, is to understand that the US wine drinker is not a wallet to be picked, but a consumer who has choices. “My take is that we’ve regressed in the marketing of wine,” he says. “You’ve got the biggest producers, like Gallo and Constellation, and they have the resources to market nationally, while everyone else just assumes the consumer will buy theirs because they should. The first thing we tell our clients is, ‘Your wine isn’t special.’ If you’re going to sell a $40.00 wine, it has to offer $40.00 worth

Share of servings by category 160

of value, and not just cost $40.00 because you think it should cost $40.00.” Second, the US remains an underdeveloped wine market for Europe apart from its traditional markets on the East Coast and California. The middle of the country offers sales opportunities, even in today’s environment, that many European producers haven’t considered. “You have to look for markets that aren’t mature,” says Andrea Boscu of Villa di Geggiano in Chianti, who adds that it’s not enough to expect to sell all of your wine in New York anymore. “The US is Italy’s first market, and we all have great expectations for it. But you have to cultivate it.” As part of this, says Boscu, you need to look at markets for your wine where you might not be selling it now and that have potential. This could be somewhere like Texas, with its four large cities and a growing wine culture. Boscu says tiny Vermont has provided surprising opportunities, thanks to groundwork by his importer. Cultivating also means visiting these new markets, which could be the difference between selling 10 cases and 100 cases a year, Boscu says. Not enough European producers, considering the expense and inconvenience of US market visits, make the effort, he says. “But if you don’t show your face, you aren’t going to sell as much wine, and maybe that’s a difference they don’t understand.” Finally, says Boscu, understand that the US consumer is more knowledgeable and wants “to have good wines without spending a fortune. They understand the price connection to quality.” In this, the wine boom did more than sell wine. It taught US wine drinkers more than they had ever known – something that will stay with them even as the wine boom ends. W

Serving index by category 70%

Wine

150 140

1/17 MEININGER’S WBI

beverage producers and marketers. “And that’s a significantly larger population than the mostfrequent wine drinkers.” What happened to end the wine boom? It wasn’t so much one thing, say the analysts, as the confluence of a variety of factors, including the aging of the Baby Boomers, who powered the growth in US wine when per capita consumption doubled between 1968 and 1988. They’re still the most important winedrinking demographic, accounting for about two-fifths of US wine sales. But that is trending down, according to a study from Silicon Valley Bank, and is well down from its historic highs. Younger demographics, and especially the Millennials, are not coming to wine as quickly as expected. They were going to do for wine what the Baby Boomers did in the 1970s and 1980s, but that hasn’t happened so far. “I see this with my daughters, who’ve grown up around wine,” says Paul Tincknell of Tincknell & Tincknell, a wine sales and marketing firm in Sonoma. “They know wine and they enjoy wine, but they aren’t loyal to wine like my wife and I are.” The growth in craft beer and spirits is also a factor. Again, the younger demographics see those as alternatives to wine – something the Boomers did not. In fact, say several analysts, there is some evidence that Millennials and Gen X-ers are happy to drink cocktails and beer with dinner instead of wine – unheard of behaviour from the Boomers – based on data from restaurant occasion sales. Then there’s the rise of the Neo-Prohibitionist movement, which has focused on health issues to curb drinking. Designated drivers, for instance, were unheard of when the Boomers came of age, but drunk driving deaths in the US have declined by one-third over the past 30 years as the concept has become popular. And there are also indications, says Miller,

60% Spirits

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SOURCE: BW166

110

N E W S A N A LY S I S WINE FRAUD

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WHERE THERE’S A WILL THERE’S A FAKE Counterfeiting of desirable wines is a growth industry and it’s becoming more sophisticated. Adam Lechmere finds out how to spot a fake.

Maureen Downey explains how to spot a fake wine.

he problem of fake wine did not go away when a Californian prison cell door slammed shut on Rudy Kurniawan in 2014. As the fraud detective Maureen Downey of Chai Consulting is constantly pointing out, no one doubts that the market is awash with fakes. She quotes the generally accepted figure that one in five bottles of fine wine on the market – 20% – are bogus. But she goes further: “Some vendors may be selling more than 50% counterfeits. It’s estimated that 70% of the Château Lafite sold in China is fake, for example.” She refers to “current” counterfeiters – “and when I say current, I mean in the last four weeks.”

Downey, whose company Chai Consulting runs a series of seminars on wine fraud, has a checklist of tell-tale signs. “Unicorns”, for example, are mythical bottles. It was unicorns at an Acker Merrall & Condit auction in New York that prompted the authorities to focus on Kurniawan. Acker’s John Kapon had authenticated Kurniawan-sourced lots of Domaine Ponsot Clos Saint-Denis from 1945 onwards – but the Domaine’s first bottling of that vineyard was 1982. Similarly, magnums

Tell-tale signs Some fakes are easy to spot: the photocopied label that says Panfaids instead of Penfolds, or Popus One instead of Opus One. Many more, though, are works of art in themselves. In Sour Grapes, the brilliant documentary about Kurniawan’s fall, his former friends (all of whom he was defrauding) pay tribute to the skill with which he recreated bottles. Label paper was aged by baking or with tea, tobacco or shellac, corks were stamped, ink was sourced to be as authentic as possible, wooden cases were stencilled.

of 1945 Romanée Conti from Domaine de la Romanée Conti are in circulation, but there were no large formats produced that year. “I have touched as much counterfeit 1945 DRC as was ever legitimately made,” Downey says. Labels: are they embossed? Are those cuts and abrasions too regular? Can you see glue around the tear? Most importantly, does the label fluoresce under UV light? If it does, and the wine is pre-1957, then you almost certainly have a fake, as ultra-white paper was not introduced until 1957. Printers: was the ink applied by a household dot-matrix, or ink jet? The former will show under a microscope, while the latter will scrape off. Smell the labels, Downey says – “if it’s genuinely old it will smell old”. She loves the feel of old bottles. Capsules and corks give vital clues. Downey found a recycling logo (not introduced until the 1970s) on the capsule of a 1959 de Vogüé Musigny; Bordeaux corks should be at least 52mm long, and you should look out for “AhSo” marks from the two-pronged extractor – if it’s been pulled before, why?

To Another Great Year

MOST FREQUENTLY FAKED VINTAGES Anything 1700s or 1800s: 1811, 1864, 1865, 1870, 1899,1900, 1911, 1921, 1923, 1928, 1929, 1934, 1937, 1945, 1947, 1948, 1949, 1950, 1952, 1955, 1959, 1961, 1964, 1971, 1978, 1982, 1985, 1990, 2000, 2005 Domaine de la Romanée Conti in 2004, 05, 06, 07, 08

MOST FREQUENTLY FAKED WINES Burgundy: Domaine de la Romanée-Conti; Henri Jayer; Domaine Dujac; Coche-Dury; Leflaive; Dme Ponsot; Ramonet; Comtes de Vogüé Bordeaux: Château Cheval Blanc; Château Petrus; Château Lafite Rothschild; Château Latour; Château Mouton Rothschild; Château Lafleur; Château Le Pin; Château Latour à Pomerol; Château Rayas; Château Ausone; Château d’Yquem Rhone: Jaboulet La Chapelle Hermitage Italy: Sassicaia; Ornellaia; Soldera Brunello di Montalcino; Bruno Giacosa Barolo; Gaja Germany: Egon Müller Scharzhofberger Eiswein California: Screaming Eagle

YOUR TRIP TO DÜSSELDORF TAKES YOU AROUND THE WORLD You would normally have to go a long way to find such an extensive sector overview and international contacts: with more than 6,000 exhibitors from over 60 countries, ProWein is the largest wine and spirits trade fair worldwide. Welcome to ProWein in Düsseldorf!

Anything claiming to be Vandermeulen

Glass is the most difficult thing to fake. Pre-1850 bottles were handblown, while the three-piece mould was introduced circa 1915 – look out for bottles that are seemingly old but don’t have any irregularities.

Counterfeiting wish list The 1945 Château Mouton-Rothschild – the legendary “Victory Vintage” – is the most-faked bottle ever, but there is a long list of classics that counterfeiters go for. Beware of the best vintages in any region – 1947, 48, 49, the great 50s vintages, 1961, 64, 71, 78, 82, 85 – but fakers also favour historic dates like 1989 (the fall of the Berlin Wall). And it’s not all old bottles. Fake DRCs, from vintages 2004 to 2008, are surfacing. The most counterfeited wines are predictably the most expensive: blue chip Bordeaux, Burgundy, Italy, Rhone and Germany. Amongst the cult Californians, only Screaming Eagle has fallen victim so far. Be wary of anything claiming to be from the great Belgian merchant Vandermeulen which was active in the first half of the 20th century, especially their 1947 bottlings. Producers are fighting back, with ever-more complex labels (Napa’s Harlan is particularly difficult to fake, Downey says), traceable ink, DNA signatures, and tamper-proof capsules. Downey has just launched the Chai Wine Vault, which uses Bitcoin’s “blockchain” technology to give a wine an immutable digital signature. She claims it’s foolproof: the digital vault is unassailable. But, as she reminds her audience at the beginning of her seminar, “If there’s money to be made, criminals will find a way.” W

The World’s No. 1: International Trade Fair for Wines and Spirits

19-21 March 2017 Düsseldorf, Germany

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PERSPECTIVES

LISBET OLSEN Regional Business Manager Europe – KWV Finland is one of Europe’s most complex and contradictory markets for imported wine. On the one hand the market can be frustrating – Finish legislation regulating the purchase of alcohol is strict, and forbids the sale of beverages with an alcohol level of 4.8% or over in supermarkets. The off-trade is totally dominated by Alko, the government-controlled retailer which has a monopoly on all direct-toconsumer sales, the exception being the ferries between Finland and Sweden/Estonia. In addition, imported wine is taxed quite heavily in Finland, supposedly to cover the healthcare costs of widespread alcoholism across the country. Taking a weekend vacation to nearby Tallinn [Estonia], where costs are significantly lower, has become a national pastime for Finish consumers. But who can blame them, when almost half of the price of a bottle of KWV wine consists of taxes (45%)? Today, the market is still largely dominated by beer and spirits, although the consumption of spirits is falling as the government repeatedly broadcasts the health message. Interestingly, beverages with an alcohol content of over 22% cannot be advertised publicly, and therefore their prices do not even appear on Alko’s website. Moreover, wine consumption per capita is significantly higher in Sweden and Denmark, and overall still wine consumption has declined over the past two years, while imports of sparkling wine are conversely rising. The market for still wine certainly hasn’t grown as quickly as I had expected, but a lot of that is simply due to the prohibitive cost of buying wine. Yet Finland offers many opportunities for the patient and diligent. We initially entered the market in 1952, selling one of the first South African brands in Finland – Roodeberg. Today, South Africa is one of Finland’s key exporters and the New World plays a decisive role in Alko’s sales. Our brand Pearly Bay is one of Alko’s top 10 bestselling wines, and the off-trade accounts for over 90% of total wine sales in Finland. Sales are dominated by the under-€10.00 ($10.78) category, and Finns purchase large amounts of bag-in-box wine. That’s the beauty of doing business here – Finnish consumers have no prejudice

The Republic of Finland, situated on the same latitude as Alaska and Siberia, has warm summers and 100 days of freezing-cold winters, which suggests a good market for strong red wine. According to the market experts consulted by James Lawrence, however, the market situation is a bit more complex than that.

toward bag-in-box wine, screwcap, or anything else you can think of. For example, over 70% of all South African wine is sold via bag-in-box, and Finns love innovative vessels – wine pouches and Prosecco in a can is becoming very popular. They’re generally a casual people and would think nothing of buying a premium wine – Chablis, for example – that wasn’t housed in a bottle, secured with cork. The on-trade, however, tends to be dominated by the Old World. Sommeliers always remark that consumers regard eating out as a special occasion, and feel compelled to splash out on classical regions like Burgundy and Bordeaux. But there is no monopoly regarding ontrade distribution, and Finland is full of willing importers/distributors who can help you get listings. But, if you’re from, say, Chile or Argentina, don’t expect to necessarily shift much volume. Off-trade is a different matter – brands can be delisted by Alko if they run out of stock. So building a relationship with a good importer is essential, as they will handle the tendering process with Alko. It’s not like the US or UK, where the importer uses his relationship with the buyer. In Finland, any brand can tender to work with the state monopoly, but it is a long, drawn-out process, and once you’re in, stock management is essential. Alko buyers can be quite demanding, and insist we create new products to satisfy demand. If you want to work with them, you need flexibility, openness, and above all, patience. But the tender system guarantees you’ll sell a minimum volume, and everything is conducted with fairness and transparency in mind.

DAVID LOSANTOS Europe Sales Director – Codorníu Codorníu first entered the Finnish market in 1965, at a time when spirits dominated the majority of alcohol sales in off-trade. Today, Finland is one of the few Scandinavian countries in which Cava is leading the sparkling category. Finnish consumers love high-quality, great-value products, and Cava sales are showing doubledigit growth. It is one of the reasons why Finland is such an important market for Codorníu, as Cava is just as popular as Prosecco. All direct-toconsumer sales of Codorníu are channelled via Alko. However, Alko has become more flexible and easier to work with over the years. They have introduced new ordering systems, which makes it much easier to obtain the orders and introduce your products. In terms of consumer

trends, the popularity of low-alcohol wine is increasing significantly. Indeed, this represents a potentially lucrative opportunity for brands, as wine with alcohol content below 5% can be sold in supermarkets.

Sales continue to be dominated by Helsinki, and to a lesser extent, Turku – the vast majority of Finland is rural and predisposed to consuming large amounts of vodka. But even in urban Finland, be aware that wine still plays second fiddle to spirits. However, the on-trade segment in Helsinki, while relatively small, is extremely dynamic, open, and willing to help.

Ultimately though, the secret to cracking the Finnish market is patience, and a good commercial plan. Your choice of partner will play a decisive role, as they will guide you through the complex tender process with Alko, and the mountains of paperwork. Like all markets, working with a good distributor is important, if not crucial to your success.

KONSTANZE KUGLER Finnish market analyst – IWSR Finland is still recovering from a severe economic recession. Its economy depended a lot on the fortunes of Nokia, and close ties to Russia did not help economic developments, either. So any positive development in the Finnish alcohol market is a surprise, to be honest. The still wine market in Finland is in decline while sparkling volumes are on the up. There is a shift from red to whites and rosé; lighter styles are very much on trend. I would not be surprised if reds will be overtaken by whites by the end of 2017. This is the great paradox in a nation historically associated with alcoholism – Finnish consumers are increasingly healthconscious and are becoming connoisseurs, knowing a lot more about categories and brands. Premiumisation is definitely happening, although most Finns are quite traditionally Scandinavian and prefer red bag-in-box wines. Nonetheless, consumers are following the trend of ‘less but better’. This has helped Old World wines to gain some volume last year. Chile remains the clear leader in both red and whites, which is probably due to its price point, but it is declining in both segments. Italy and Portugal saw excellent volume gains in 2016 in the red wine segment. Whites from Germany, Australia and Spain grew last year in the Finnish off-trade. Smaller countries of origin, such as New Zealand, are of interest for consumers who love searching for new and exciting products. Wine writers remain a huge influence in the market as advertising is restricted. Brands must also be aware that alcohol is very expensive in Finland due to extremely high taxes. Home consumption therefore prevails. Private imports from Estonia have been troubling the local alcohol market for years, as taxes there are much lower. Many Finns take the ferry across as a day trip and bring back unbelievable amounts of alcohol and sell it on to their friends and family. It is an actual business for many people.

Moreover, the on-trade also suffered badly during the recession but is slowly picking up again. However, consumers have cut back on the amount they drink in the ontrade due to extremely high costs, so they want to make their on-trade visit special. Out of all the monopoly markets, Finland is probably the most restricted one, and it is hard for importers and distributors to get detailed information on their own brand’s performances. Which is why a good partner is essential, as they can steer you through working with Alko. Indeed, any brand already in Finland will tell you the same thing – the tenders in the monopoly and performance times can be very frustrating as it is so difficult to get into the shops in the first place, and if sales do not reach a certain level, the brand is kicked out again. Advertising is also restricted so it is hard to launch new products. Overall, I’m not very optimistic about the future of the Finnish wine market. I do believe, though, that it needs to bottom out at some point, as it has been declining for so long. Premium wines should perform well as entertaining guests at home has replaced many on-trade visits and consumers are looking for better products to serve guests. But my final advice to brands is this – you need to have a unique proposition to gain consumers’ attention in this tough trading environment. Finns travel a lot, so a great international reputation helps products to perform well in the Finnish market.

FAIRS PROWEIN

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ProWein 2017 at a glance ProWein is the must-visit international wine trade fair that brings the wine world together in Düsseldorf. PROWEIN Düsseldorf, Germany 19 to 21 March 2017 www.prowein.com

ORGANISE YOUR APPOINTMENTS IN ADVANCE The Extended Exhibitor Search on ProWein’s website offers you an easy way to plan your visit to ProWein. The tool lets you filter contacts and make appointments more seamlessly, using MyOrganizer and MyCatalog to keep it all in order.

FAIR EVENTS From individual exhibitor events to the central tastings, there’s more on tap at this year’s ProWein than ever. Here’s what you can expect: 99 The central tasting zone in Hall 17 is devoted to the wines that impressed at the MUNDUS VINI spring tasting. Some 500 wines will be available for open tasting. 99 The stylish Champagne Lounge is open again in Hall 12, where more than 60 wines from 40 estates will be exhibited. 99 Taste the latest cocktail trends at the FIZZZ Lounge in Hall 12, where the latest bar techniques will be demonstrated. 99 What’s the same but different? Find out in Hall 16, where 10 participants will showcase their creative marketing methods. 99 Immerse yourself in new packaging ideas in Hall 13, where the latest technology and thinking will be showcased. 99 Tastings, tastings, tastings. Whether you want to benchmark your own wines, or simply wish to learn more about the di-

Don’t miss the Meininger’s International Wine Conference A WINE MARKET PERSPECTIVE: SALES, PRICE, DISTRIBUTION AND COMMUNICATIONS

Some of Germany’s most knowledgeable thought leaders come together to discuss the elements that will affect future wine consumption. All aspects of wine marketing will be thoroughly examined, from pricing and distribution through to communication and digitalisation. Questions on the table will include: How are prices generated? And what are the opportunities for price differentiation? How does wine advertising work, and what opportunities does digital offer for creative outreach? Does traditional advertising even make sense in a world of smartphones and tablets? All this and more will be discussed at this thought-provoking one-day seminar, held the day before ProWein at the InterContinental Düsseldorf hotel. Your entrance ticket includes one valid entry to the prestigious Meininger Award – Excellence in Wine & Spirits, held that evening at the same venue. meiningers-conference.com

verse range of wines in the world, you could do no better than to check the list of tastings. Visit prowein.com for more information

PROWEIN GOES CITY 2017 For a decade now, Düsseldorf has partnered with ProWein to showcase the best of what the city can offer. With your food- and wineloving colleagues and partners, you can enjoy a literal feast of wine tastings, special menus, cookery courses and parties, plus the popular Gourmet Walk. This year, some 50 restaurants, hotels and wine merchants will be taking part in the joint initiative of Messe Düsseldorf and the trade association Destination Düsseldorf. prowein-goes-city.de

GETTING TO THE FAIR From Düsseldorf International Airport, take bus 896 or a taxi to the Trade Fair Center or CCD Congress Center Düsseldorf (10 minutes). From Düsseldorf ’s Central Station, take subway trains U78 or U79 (20 minutes). All admission and e-tickets include free transportation to and from ProWein on the Regional Transport Network Rhein-Ruhr (VRR). For more detailed information, including regulations regarding auto travel in Düsseldorf’s lowemission zone, see the ProWein website.

World’s Favourite Malbec* Located at the foothills of the Andes Mountains in Mendoza, Argentina, Trapiche sources its Malbec from prized vineyards at over 3,000 feet of elevation, resulting in rich yet balanced Malbecs. Founded in 1883, Trapiche prides itself on a legacy of quality, which today can be enjoyed through its portfolio of high-scoring, award-winning wines. *Caucasia, based on Calendar Year 2015 Malbec exports and domestic shipments.

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DÜSSELDORF BEYOND THE MESSE If you find yourself with a few hours to spare, head out to explore Düsseldorf, beginning in the famous, cobble-stoned Altsadt (Old Town). This is home to the significant cultural venues of the city, such as the Opera House, Theatre and Concert Hall; some of the city’s most beautiful churches, like the 13th-century Sankt Lambertus Basilika; and the renowned Museum Kunstpalast. The contemporary destination MedienHafen boasts some stunning postmodern

architecture, courtesy of Frank Gehry. Here you’ll find plenty of trendy bars and restaurants that are perfect for an after-show meeting with clients, or for relaxation. Düsseldorf is also known as an elegant shopping destination thanks to Königsallee, a boulevard of high fashion and extravagant wares, and a number of luxury hotels and top-class restaurants. For more recommendations, see Düsseldorf Marketing & Tourismus’s Best of Düsseldorf page: duesseldorf-tourismus.de/en/ best-of-duesseldorf

Vinitaly 2017 Italy shows its wines to the world, as 4,000 exhibitors and 150,000 visitors celebrate the nation’s stunning wine culture. GETTING THERE Free shuttle buses to the Exhibition Centre operate at regular intervals from the railway station, the city centre and the airport. If you need any further help or information, call the Exhibitor’s Help Desk on +39 045 8298250. Four extra reasons to visit: 1. Conferences with experts Research and insights presented by experts are on offer throughout the show.

2. Special shows Sommeliers, journalists and producers will hold numerous tastings throughout the fair. 3. Tastings of top wines Thematic, educational and prestigious vertical tastings. 4. Great cuisine Enjoy exquisite food and wine pairings at the Citadels of Gastronomy. For more information visit www.vintaly.com

PHOTOS: ENNEVI - VERONAFIERE

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FAIRS PROWEIN

VINITALY Verona, Italy 9 to 12 April 2017 www.vinitaly.com

Domaine d’aussières

The Elegance of the South of France Noble and generous by nature.

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MARKETING STORYTELLING

THE ART OF WINE STORYTELLING What can the wine industry learn from the bestseller 50 Shades of Grey? Felicity Carter looks at the research.

Brain imaging has revealed the effect of stories on the mind.

hen Rebecca Hopkins worked at Australia’s Wirra Wirra winery, she used to tell tourists how Mrs Wigley – the black cat who sat by the fire – was first found sleeping in the open concrete fermenters. One day, Hopkins overheard a customer retelling the Mrs Wigley story, except Mrs Wigley was now a mythical black leopard of the vineyard, who only came out at night to hunt chickens and prey on foxes and small children. That day, says Hopkins, she sold more than the usual volume of Church Block, Wirra Wirra’s most famous wine. Stories sell – which is why storytelling is marketing’s hottest new trend. Anyone who’s been to a wine conference lately will certainly have heard the cry go up for the wine trade to ‘tell its stories’. But what is ‘storytelling’, and how can the wine trade do it effectively? New research has uncovered some surprising answers.

Stories stick in the mind This question of why humans tell stories has long preoccupied anthropologists. It’s been suggested that stories were a way for pre-literate peoples to remember important events; or that stories were used as maps,

deeply averse to telling stories in the way that to help one another find food and avoid are most likely to attract attention. danger; or, as evolutionary psychologist Dr Robin Dunbar has argued, stories may have evolved from gossip, to help humans bond. Five keys to success Whatever the reason, Dr Jennifer Aaker from the Stanford Graduate School of Business, Sex doesn’t sell. That was one of the most has said that “stories are up to 22 times more surprising – and counterintuitive – findings memorable than facts alone”. of Keith A. Quesenberry from John Hopkins Dr Paul J. Zak, a neuroscientist at Claremont University, who analysed 108 Super Bowl Graduate University, has used brain imaging commercials. to understand how people react to stories. In The Super Bowl is one of the US’s biggest one experiment, he showed a cartoon about a events, with an estimated audience of 113m. father coming to terms with his son’s terminal Advertising during the game is expensive – a cancer. Those who watched the film described 30-second ad costs about $4m, so the aim is feeling both empathy with the characters, and to create ads that go viral. Quesenberry and distress. Zak also analysed blood taken before business professor Dr Michael K. Coolsen of and after the film. It turned out that watching Shippensburg University conducted a 2014 the story made the viewers produce two study on successful Super Bowl Ads. “People hormones: cortisol, which focuses attention, think it’s all about sex or humour or animals, and oxytocin, the ‘bonding’ molecule; women but what we’ve found is that the underbelly of produce it during pregnancy and while a great commercial is whether it tells a story nursing. Zak’s research dovetailed nicely with or not,” Quesenberry said at the time. other studies that suggest the brain treats He discovered that the key to a great ad, imaginary experiences as if they’re real. It’s regardless of the product, was the story why people cry when a character dies, and structure. The story must have five key why horror films make the heart pound. elements: an inciting moment, a complication, These insights are already being exploited a climax (or turning point), a reversal, and by major companies, who spend millions of then a resounding finish. In fact, Quesenberry dollars creating compelling brand stories. simply rediscovered what the 19th-century Take the 2017 Budweiser Super Bowl German playwright Gustav Freytag had laid commercial; called “Born the Hard Way”, out in 1863. Freytag analysed classic dramas it tracks the story of co-founder Adolphus and realised that they all had this five-act Busch, as he sets out to reach America and structure, now known as Freytag’s Pyramid. brew beer. Along the way he faces storms, rejection, ship fires and injury. freytag's pyramid The commercial went viral, racking up climax millions of views on YouTube less than a week after its first showing. falling action This suggests that storytelling should be an easy win for the wine industry. rising action After all, wine comes out of riskresolution taking, farming, history and interesting people. But there are two catches. The first is that it’s not just the story that’s inciting incident important, it’s the way it’s told. The exposion second catch is that the wine trade is

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writing – as novelist Salman Rushdie said, “I’ve never read anything so badly written that got published. It made Twilight look like War and Peace.” For some commentators, the fact that the book coincided with new ebook technology explained everything: the Kindle allowed women to read erotic fiction in public, without anybody realizing what they were up Major Scenes in Fifty Shades of Grey The Glider

Graduation Sex Meet Again? The Boathouse

Vanilla Sex

Throw Him Out! SOURCE: ARCHER AND JOCKERS, THE BESTSELLER CODE

evidence of how powerful these story arcs can be, consider Donald Trump’s slogan, “Make America Great Again”. Structurally it’s what’s called a rise-fall-rise, or Cinderella, story: America was great, then it declined, and Trump will make it great again. Biodynamic winegrowers often tell a similar tale: one day they realised their soil and/or vineyard was lifeless, so they converted to biodynamic methods, and now their vineyard flourishes and their wines are better. It’s the age-old rags-to-riches story – and it’s powerful. Once structure and plot are in place, a memorable story needs one more element. Emotion

But having the right underlying structure in place isn’t enough – plenty of five-act dramas have bombed. To make a story memorable and effective, it has to have two other elements as well. One of them is plot – something has to happen to someone. But the plot must also follow a strict pattern. One writer who became intensely interested in story patterns was novelist Kurt Vonnegut, who would graph them out: the X-axis represented the passage of time, from beginning to end, while the Y-axis represented the events. “Somebody gets into trouble, gets out of it again,” said Vonnegut in 1995. “People love that story. They never get sick of it.” Recently, Andrew Reagan from the University of Vermont decided to test whether stories really did have the patterns Vonnegut had suggested. Reagan took 1,700 stories and used data-mining to reveal the most common plots. He discovered that there were six basic story patterns, which can either be used alone or as sequential building blocks (see side bar). If you need

Mrs. Robinson Dinner Drunken Vomit

The rollercoaster

His Sad Side and The Rules

If sex doesn’t sell, why was 50 Shades of Grey the fastest-selling book in history? The novel is one long feast of kinky sex. It certainly didn’t become popular because of the

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to. Others suggested it was the discreet grey cover that did the trick. But two Stanford University scholars, Jodie Archer and Matthew L Jockers, have another explanation. Archer and Jockers fed 20,000 New York Times bestsellers into their computer, looking for what breakout books have in common. The computer spat out an answer: a book whose emotional journey was shaped like a rollercoaster was likely to be a bestseller, regardless of how well or how poorly written. Both 50 Shades of Grey and Dan Brown’s mega-selling The Da Vinci Code were identified by the computer as having a perfect rollercoaster shape. A story must have emotional highs and lows – which confirms the work of Dr Zak. A good story needs poignant, frightening, or nail-biting elements if it’s to provoke cortisol, the hormone that focuses attention. If the story doesn’t have both light and shade, it’s doomed to be forgotten.

THE SIX BASIC STORIES: Rags-to-riches (rise) Tragedy (fall) Man-in-a-hole (fall-rise) Icarus (rise-fall) Cinderella (rise-fall-rise) Oedipus (fall-rise-fall)

Any good anecdote that has a ‘gossip’ factor can substitute as a story, such as the tale of how the owners met and fell in love, or the time the President came to visit. If all else fails, tell an animal story: The cat that slept in the fermenter is more of an anecdote than a story, but it has a quirky and memorable quality to it, that will keep customers talking about it every time they pull out your wine. And if the cat is magically transformed into a leopard in the minds of the people retelling the story, well, some of that magic may rub off onto your wine sales. This article is Part 1 of a two part series. It is based on a presentation given at wine2wine 2016 by Felicity Carter. Part 2 of this article will appear next issue, when co-presenter Rebecca Hopkins, VP of communications, Folio Fine Wine Partners, explains how to execute a storytelling marketing strategy. W

history, it would give their story the rollercoaster shape. What would make the story even more memorable, is if the owners talked about some of the struggles their ancestors went through to What does this mean for wine? make the winery successful. And here’s the problem. New World wineries For the sake of the exercise, I took several love telling their rags-to-riches stories. This family wine stories and graphed them. I did this magazine has profiled Susana Balbo, the several times, and every time I came up with a Argentine pioneer who overcame bankruptcy story that was all light and no shade. Typically, and her country’s economic collapse to the founder recognises a perfect patch of ground become one of the country’s most-successful and plants a wonderful vineyard, and the wines winemakers. It’s a great and memorable are soon being acclaimed: story she’s proud to tell. French winery The owners of Old World wineries, on the other hand, Award winning typically refuse to discuss winery anything that could be construed as negative – even New generation if the true story is gripping. When I gave a talk on this at wine2wine in Verona, several members of the Launched Paris/Berlin big brand medals audience asked how they could convince reluctant wine clients to tell their true stories. First, find a reversal Bought land that’s neutral – that time, for 1800 1888 1930s 1940s 2000s example, when the vineyard Time flooded but the heroic workers managed to save part of the harvest. If wineries are unwilling to But look at the timeline of the example. discuss even bad weather, then storytelling is Several major events must have affected the not the right marketing strategy for them. winery: a devastating outbreak of phylloxera There is another option: remember that and two world wars. If the winery would storytelling began as a way to pass on gossip. mention how one or two of these impacted their Events

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MARKETING STORYTELLING

THE FIVE-ACT STORY OF GRANGE The story of how winemaker Max Schubert developed Penfolds Grange has all the elements that make it memorable. After a trip to France in 1949 (inciting incident), Schubert decided to create a wine that could age as well as the Bordeaux First Growths. He set out to map the best vineyards that would supply the raw material (rising action) and finally made the wine he wanted (climax). But when the first vintage (1952) was released, it was poorly received. In 1957, Penfolds finally told Schubert to stop production (reversal). But he secretly persisted and eventually, after the Penfolds board tasted some of the early examples, he was allowed to continue. Today, Grange is recognised as one of the world’s top wines (fairytale ending).

1/17 MEININGER’S WBI

M A R K E T W AT C H FINLAND

100 YEARS OF WINE IN FINLAND PHOTO: MIKHAIL MARKOVSKIY - FOTOLIA.COM

Wine consumers in Europe’s cold north are navigating their way through big brands, a big monopoly, and vibrant restaurant wine lists, reports Ilkka Sirén.

Helsinki, capital of Finland

his is a big year for Finland. The Finns are carefully choosing their party hats as they get ready to celebrate the centenary of Finland’s independence. But do they celebrate with a glass of sparkling wine, or perhaps with a pint of beer? Traditionally the Finns have been an enthusiastic bunch when it comes to beer and neutral, vodka-like spirits. And Finland has a bit of a reputation when it comes to alcoholic beverages. Whether it’s because of the cold climate or the long, dark winter, there has always been a thirst for a soul-warming tipple or two.

At a glance In 1919, just a little more than a year after Finland gained its independence, a Prohibition started which lasted until 1932. When the Parliament repealed the Prohibition Act, the government-owned Oy Alkoholiliike Ab was granted an exclusive right to import, export, produce and sell alcoholic beverages. A monopoly was born. Today, the company known as Alko holds a retail monopoly for all beverages with an alcohol content higher than 4.7%. “We currently have 354 shops across Finland,” says Taina Vilkuna MW, the

product communications manager at Alko, who has worked for the company nearly 30 years. “We have come a long way. The wine selection in our shops was something quite different back in the ’80s. But the Finns are starting to develop a taste for wine. People are very eager to learn about different styles of wine, and with the internet these days it’s easy to seek information.” She says that the average Finn – assuming there is such a thing – drinks a bit more red wine than white, and the wine is most likely from Chile. “It’s pretty incredible that over 28% of the red wine sold through Alko is from Chile, this one country on the other side of the world,” Vilkuna adds. The first Chilean wine came to Alko in 1990, and these soft and fruity wines seem to fit the Finnish palate. “New World wine countries are strong, but we are seeing a trend toward European wines with a slightly bigger price tag.” She points out that consumer behaviour is different in the bigger cities, such as Helsinki, Turku and Tampere, where there is not only more interest in wine, but where people are happy to invest a bit more time and money to find the right wine. As a Nordic country, the seasons are

strong in Finland and it often dictates the drink of choice. National holidays can have a major effect on certain wine categories. For example, the festival on 1st May, or ‘Vappu’ in Finnish, is all about sparkling wine. On the week leading up to 1st May, the sales of sparkling wine in Alko goes up by 430% compared to a normal week. This means that approximately 610,000 bottles of sparkling wine are sold through the monopoly shops in the last week of April. From May until the end of June it’s the season for bubbles and crisp white wines. The beginning of summer is the time for school graduation parties and it’s also a popular time for weddings, which further helps to boost sparkling wine sales. While Finns are big fans of Cava, the global Prosecco trend is also making itself visible. Last year, this category of Italian sparkling wine grew by 16.5%, and was the first year that Alko sold more Italian sparkling wine than French. Rosé wines are also increasing in popularity, but is still a small category, representing only 2% of Alko’s wine sales. Perhaps it’s because of the erratic nature of our summer weather that it’s December that is the biggest season for wine in Alko, both

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in volume and value. As the proud homeland of Santa Claus, the country naturally takes Christmas very seriously.

The on-trade Alko isn’t the only place in Finland for wine. The restaurant and bar scene in Finland is evolving fast and there are plenty of places popping up where the wine menu is well thought out. It is in the restaurants that people can explore more interesting wine styles, regions and grape varieties, beyond the selection available in Alko. “We offer customers wines that we like to drink. I like delicate and fruit-driven wines,” says Nicolas Thieulon, restaurateur and sommelier. “If a customer wants a big bold red like Amarone, well, he is not going to find one here. We are addicted to the deliciousness of wine and the whole enjoyment of it.” Thieulon’s restaurant BasBas in Helsinki offers almost exclusively natural wines. “Most people that come through the door have no idea what natural wines are or what it means. But they are usually very open-minded and curious to learn more.” He describes natural wines as, “Pure fruit and natural, that’s it. And clean. Of course there are some producers that really know what they are doing – some do not. Being ‘natural’ doesn’t mean the wine is automatically good,” says Thieulon. “There are wines that were not meant to be funky but they just ended up that way. But if the producer is sharp and knows his stuff a consistent quality can be achieved.” Thieulon says that wine in Finland has managed to retain its romantic aura. “It’s seen as this natural thing, not something that can be mass-produced. What is a natural wine? What is not? People here just don’t think about stuff like that when they are drinking wine,” he says, suggesting that because Finnish customers aren’t prejudiced about wine, it’s easier “to influence how they experience wine in a restaurant.” Working together with restaurants and Alko are the wine importers. The Association of Finnish Alcoholic Beverage Suppliers has some 30 members, and together they account for 90% of the alcohol-importing business. “For importers the biggest business by far is Alko, and if you really want to succeed here in Finland that should be your main

goal,” says Tuomas Meriluoto MW, CEO of wine-importing company Winestate. “Alko represents roughly 90% of the Finnish wine market but only 10% of the products available on the market, whereas the restaurant side represents only 10% of the business but 90% of the individual products. Needless to say the competition there is pretty ridiculous, and although the restaurant side is important, the main focus for us is Alko.” The Finnish monopoly system can be opaque for many wine producers, so they try to break into the market through the restaurant scene. “Some producers think that if they get their products on enough wine lists in Finland, that would help them through Alko’s door,” says Meriluoto. “That is in fact not true. I have never heard of a wine that got a listing because it was popular in restaurants. That is not how the system works,” he adds. “If you do get your product in Alko – which is damn hard by the way – then of course you want people to see it in restaurants as well. But the challenge nowadays is that many restaurants do not want to sell the same wines that are available in Alko because they want to offer the customer an exclusive experience. So, in the Finnish market it’s difficult for a wine to be successful on both fronts.”

Beyond glass Finland adopted bag-in-box wines back in 1998 and now, only two decades later, 38% of all wine sold in Alko comes in a bag-in-box. “Bag-in-box is really important for us. If you consider the amount of wine sold in a BiB and the amount of brands available compared to wine bottles, it’s really an interesting market,” says Meriluoto. “The competition is intense, though. Importers fight over shelf space in Alko, so you really need to support the product with marketing,” he continues. Finnish consumers are used to the 3-L BiBs, but there are more and more 1.5-L and 2-L pouches and BiBs coming into the market. “The thing is, Finns do not love glass. Others might still want their glass bottle with a closure made from a piece of bark, but Finns don’t care if the wine comes in a box, pouch or a plastic can. There is already a generation of people in Finland who were introduced to wine in a bag-in-box and only after they discovered bottled wine.” It is difficult to say where the Finnish

wine culture will be in 100 years from now, or even in 20. There is a lot of swinging back and forth in the political scene about alcohol-related laws and restrictions. Many wish to run down the monopoly, while others celebrate it, arguing that without it, Finland’s nascent wine culture could be lost overnight. Whatever the case, the Finns are unlikely to stop swirling that glass once they have got the hang of it. W Finland 2016 Red wine

1,000 L

+/- %

No. of products 192

Chile

6,957

-2.3

28.4

Spain

3,903

-3.5

15.9

252

Italy

3,840

15.5

15.7

459 128

Australia

2,489

-9.1

10.2

Argentina

1,958

-14.9

110

France

1,823

-2

7.4

345

South Africa

1,809

-7.3

7.4

100

Portugal

888

22.7

3.6

USA

447

2.8

1.8

All others

390

-2.9

1.6

108

TOTAL

24,504

-1.6

100

1,849

White wine

1,000 L

+/- %

No. of products

Chile

4,794

-0.9

22.6

South Africa

3,555

0.3

16.8

Germany

2,745

9.9

13.0

139

Italy

2,051

0.6

9.7

149 288

France

1,857

-5.7

8.8

Australia

1,616

5.4

7.6

Spain

1,579

3.9

7.5

77 44

USA

1,129

-7.8

5.3

Hungary

711

-8.9

3.4

All others

1,129

-4.9

5.3

191

TOTAL

21,166

0.2

100

1,135

Sparkling wine

1,000 L

+/- %

No. of Products

Spain

1.984

6.8

37.1

120

Italy

1,272

16.5

23.8

117

France

1,136

0.3

21.2

418

Germany

285

-6.3

5.3

Australia

150

-16.2

2.8

Luxembourg

139

21.9

2.6

New Zealand

117

-14.5

2.2

All others

271

-24.7

5.1

TOTAL

5,355

3.5

100

767

Total Wines

1,000 L

+/- %

No. of products

Chile

12,187

-1.9

22.6

300

Spain

7,86

2.3

14.6

478 745

Italy

7,317

11.5

13.6

South Africa

5,528

-3.2

10.3

188

France

5,087

-2.8

9.4

1,091

Australia

4,315

-3.5

8.0

219

Germany

3,319

9.6

6.2

185

Argentina

2,403

-13.2

4.5

143

All others

5,865

-2.4

10.9

601

TOTAL

53,881

100

3,95

SOURCE: ALKO SALES STATISTICS

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M A R K E T W AT C H FINLAND

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CONFERENCE WINE VISION

1/17 MEININGER’S WBI

A SUMMING UP OF WINE Robert Joseph went along to the Wine Vision conference, which brought some of the most significant members of the industry to the one stage. This is his report.

n the final weeks of 2016, around 200 prominent members of the wine industry made their way to Santa Rosa in California for the fifth edition of Wine Vision, the conference launched in London in 2013 by the UK-based event organiser William Reed. An impressive list of speakers included Stephanie Gallo, Marc Soccio of Rabobank, Rob McMillan of Silicon Valley Bank, and two of the biggest retailers in the US, Terry Creaturo of Kroger and Annette Alvarez-Peters of Costco.

Wine Vision was held in California.

What’s the story? The scene was set by the event moderator, Ray Isle, of Food & Wine Magazine, who challenged the industry to answer the essential question behind the marketing of any wine or region: “What’s the story?” Catching Isle’s ball, Lulie Halstead of Wine Intelligence began by talking about her teenage son’s delight in ordering a modern version of the Sovietera Vostok Amphibia watch, and her initial nervousness. What was this timepiece? Was he about to be ripped off? This confusion and fear, she said, was comparable to the emotion most consumers experience when confronted with the ‘wall of wine’ in a supermarket. Wine, Halstead continued, involved several different levels of complexity for its buyers. Quite apart from the ‘category’ complexity of region and grape varietal, and the ‘product’ complexity of vintage variation, there are ‘situational’ and ‘social’ complexities of where and when a wine is going to be consumed, and with whom. These issues are surprisingly ubiquitous across the globe. As Halstead said, “Wine is complex but people are very similar” in the way they handle its challenge. Referring to Daniel Kahneman’s bestselling book, Thinking, Fast and Slow, Halstead explained that, instead of using slow, analytical thinking to try to decide which wine to pick up from the shelf, most consumers make their choices quickly and instinctively, relying on elements with which they feel most familiar.

Producers, she continued, need to think about this when deciding whether to focus on acquiring new customers or trying to persuade existing ones to buy more bottles. Regular wine buyers are a minority, so relying on them to help build volume sales is risky. On the other hand, creating awareness among new consumers is not simple either, as was demonstrated by Wine Intelligence research suggesting that a third of regular US wine drinkers struggle to name a single wine brand without prompting. Only half can recall more than two. As important as awareness is memory, and the buzz marketing term ‘centrality’, which refers to the role a brand has within a consumer’s life. (Apple, Coke and Nike all have strong centrality, with their customers unwilling to switch allegiance to a competitor.) Many people buy a wine brand once, Halstead explained – few buy it frequently. Linda Petta, head of Entertainment Solutions for Brands at YouTube, pointed out that her company is second only to Google in the list of most widely used online searches. Four hundred hours of material are uploaded every minute; however, with some 11m wine-related videos already on offer, it is hard to get noticed. The answer, Petta explained, lies in offering ‘snackable content’ – informative clips delivered with passion and humour in under two minutes and delivered regularly. Uploading one great clip is not enough, she stressed, as brands that succeed on YouTube upload material at least weekly.

Kevin Shaw of design agency Stranger & Stranger discussed the lack of imaginative thinking in the wine industry. Shaw, whose award-winning packaging concepts have included the paper-covered Paperboy brand and square-shaped California Square bottles said that while his studio is constantly working on new concepts for spirits brands, he had only been asked by clients to create bespoke wine bottles on four occasions. “Watch consumers pick up spirit bottles. They are more interesting, more tactile, with much more to discover.” Shaw’s tactile spirits bottles tend to benefit from bigger marketing budgets, and greater consumer awareness, than most wines.

What retailers want Annette Alvarez-Peters, head of wine buying at Costco, one of the world’s biggest wine retailer, pointed out, “It’s very difficult to pioneer new items. How do consumers know if it’s a value wine if they’ve never seen it before?” Costco, she said, has a “five-by-five” rule – products have to be recognisable from five feet and buyable in five seconds. This strategy allows wines to be moved around the store and a minimum of signage to be used. “Our customers hunt for wines and they know that our rotation means that if they don’t buy today, they may never get another chance. Having a lot of one-off purchases gives excitement.” Terry Creaturo of Kroger, the biggest supermarket chain in the US, offers a much larger range – 800 to 3,500 wines compared to Costco’s 235, with a more provocative retailing style. “We hit customers in every way possible,” she says, including offering an app with food-and-wine matches. A shelf-talker saying “goes great with fish” will sell a wine, she says. The time it takes to read those words, it seems, is “how long you’ve got” to make the sale. Wines, she says, are given nine months

The future The focus shifted to China, with Marc Soccio of Rabobank and Edouard Duval of East Meets West, one of China's most dynamic distributors, picking up the ball. Soccio demolished some widespread exaggerated impressions of China’s wine industry. “Only 15% of the grapes are used for wine and only a small proportion for quality wine,” said Soccio, and China has yet to find a “globally competitive” region in terms of price and quality. He also revealed large recent increases in imports of both bottled and bulk wine. France is still king among these, but Australia, Spain and Chile are showing faster growth. Duval also discussed the great potential that is now offered by online sales to market to hundreds of millions of people across China, and the need to have a memorable Chinese name for a brand, and to protect its ownership. Chris Savage from California's Gallo joined Hugh Reimers, the Kevin Shaw, founder of Stranger & Stranger design company, says the wine industry needs to be as innovative as the spirits industry has been.

Australian-born president of Jackson Family Estates, to talk about sustainability, which is a big focus for the Sonoma region, while Stephanie Gallo surprised the audience with a frank admission of subsequent generations’ failure to achieve founders Ernest and Julio’s aim to popularise wine in America. She suggested that the industry has to change the way it thinks when talking to Millennials. Martin Brown, CEO of Wine-Searcher, revealed that retailers now offer much wider ranges than in the past – up to 25,000 SKUs in some cases – though without necessarily holding stock. Price transparency had not made wines cheaper, he said, but it has reduced the range of prices for the same products, bringing the highs and lows closer together. No major wine conference would be complete without a discussion of closures, and there were two talks on offer — one by Dr Eric Wilkes, group manager of the Australian Wine Research Institute, and the other by Dr Stéphane Vidal, vice president of enology & wine quality solutions at Nomacorc, from which attendees learned that while the quality of corks had improved, reliability was still an issue. Using data from over 100,000 entries to the International Wine Challenge, Wilkes showed that the incidence of TCA-taint had dropped from 1.6% in 2007 to around 1.1%. A similar proportion of cork-sealed wines also suffered from oxidation, though this was also a problem for other closures. Perhaps the most memorable speaker was Dr Ahmed El-Sohemy, Canada Research Chair in Nutrigenomics at the University of Toronto, who talked about ongoing research into links between health and personal taste and individual DNA. In the 1990s, it was established that some people – the socalled ‘super tasters’– are more sensitive to bitterness than others. More recent studies show that particular individuals may be hardwired to desire more sugar, or to strongly dislike cilantro. El-Sohemy was less than convinced by the claims of a US wine company being able to tailor wines to customers’ DNA, but did not rule out the possibility of this becoming a possibility in the near future. If El-Sohemy is right, perhaps the ‘stories’ that help to sell wine in the future won’t be created by producers and distributors. Maybe they’ll stem from the genetic characteristics of the people buying the bottles. W SoulVerona_2014

PHOTOS: CRISTIAN TZECU

to prove to the buyers that they are worth listing. Both Alvarez-Peters and Creaturo agreed that points out of 100 still work. But not necessarily points from the Wine Advocate, Wine Enthusiast or Wine Spectator. “You could get a 95-point rating from the chef down the road and it would be enough,” Creaturo suggested. The two retailers also concurred that it is up to the brand owner to create demand. “Most purchases are based on what customers already know and recognise. Your wine could be made from 100-year-old gnarly vines and hand-picked by the full moon by a family who’ve owned the land for hundreds of years, but it won’t reach my customer unless you have a way to tell them that story,” said Creaturo. She made another important point: “Suppliers want to be in all our stores, but it’s logistically impossible for a smaller winery to service 350 stores twice a week.” People, she explained, have to be realistic about what they want and what is really achievable.

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CONFERENCE WINE VISION

WINE INNOVATION Meininger’s Wine Business International sponsored the Trailblazers competition at Wine Vision 2016. Robert Joseph reports on the results.

f one of the most oft-repeated words at the 2016 Wine Vision conference was ‘innovation’, it was appropriate that the final session of the event was entitled ‘Trailblazers’ and devoted to spotlighting people who are trying, in very different ways, to introduce change to the industry. Loosely modelled on the television programmes Dragons’ Den and Shark Tank, the format involved participants pitching their ideas to a team of experts. Unlike their TV counterparts, however, the Wine Vision judges were not potential investors, but they had a lot of advice to offer, and in one case, the provision of some otherwise costly professional services. My role, on behalf of Meininger’s Wine Business International, which sponsored the session, was to assemble the panel and moderate the session. I was delighted to have three highly qualified people on stage – Jaime Araujo, whose wide experience includes working with her parents’ ultra-premium Napa estate, at LVMH in Paris, and running her own binational consultancy in France and Hong Kong; British-born and now Sonoma-based Kevin Shaw, who happily admits to being the most expensive drinks packaging designer in the world (and whose studio regularly wins an embarrassingly large number of awards); and finally, there was Dr Damien Wilson, an Australian academic who is the inaugural Hamel Family Chair of Wine Business

Education with Sonoma State University’s Wine Business Institute. Unfortunately, one of the three finalists selected from a large number of would-be Trailblazers was unable to make the trip to the US. However, the two remaining contenders offered a pair of projects that impressed the judges and the audience, who also had the chance to question them.

and figure. Responding to a question from Araujo about how she could handle competition from other low-sugar wines, she replied that the strength of her brand lay in its name. The word ‘skinny’, she said, was part of the general vocabulary, thanks in part to its association with skinny latte coffee.

The skinny on innovation

Next up was James de Roany, another LVMH alumni who has been a wine consultant since 2009. His project was undeniably groundbreaking, taking the form of a light, biodegradable bottle. PET bottles, he explained, have failed to win over the wine industry, despite their much lower weight. On the one hand, they are associated with cheap wine; on the other there is an environmental issue, because if they are not recycled, they join the mass of plastic debris floating in the ocean. De Roany is not unique in looking for a biodegradable solution – new product development teams at Heineken and Coca Cola are as well – but he’s the first to be doing so for wine, using material woven from flax fibre, which he said was five times finer than human hair, immensely strong, and grown without irrigation or chemicals. To address the ‘cheap’ image associated with PET, de Roany had decided to launch his product with a Champagne. However, given the production rules for that category, this meant that the wines would have to be produced in glass bottles that are covered with the flax rather than purely out of the fibre itself, which, as Damien Wilson pointed out, rather reduced the point of the exercise. Araujo was interested to learn that the biodegrading process required the breakage of a bottle that de Roany had said was strong enough to withstand dropping from a window several floors up. Kevin Shaw also noted that the opaque nature of the flax bottle might be an issue for many wine producers – and consumers. Despite these issues, Shaw was sufficiently impressed by both this concept and Skinny to offer their creators free consultancy. W

As a former BBC reporter, Amanda Thomson was clearly experienced with a microphone. Disarmingly, she freely admitted that her company Thomson & Scott’s new brand, Skinny, was not technically innovative in offering Prosecco and Champagne with less sugar – and thus fewer calories. Zero dosage Champagne has been available for decades, but as Thompson said, apart from wine enthusiasts, few consumers know about it. Despite the growing array of zero- and low-sugar foods and drinks on the market, she believed she had found “a gap in the wine market”. Without any help from vinous opinion formers, but with some clever marketing, her brand had become the bestselling wine on the website of the highprofile London store Selfridges. The panel were very impressed by the concept, and by Thomson’s explanation that she was targeting a set of well-heeled, mainly female consumers who care about their health

The judges and trailblazers at Wine Vision 2016.

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1/17 MEININGER’S WBI

THE FINANCIAL ANALYST AN INT E RV IE W W I T H R O B M C M I L L A N

BY RO BERT JOSEPH

ob McMillan founded the Silicon Valley Bank’s wine division in 1992, helping it to become the leading provider of financial services to the US fine wine business. In 2000, he launched the annual SVB State of the Wine Industry Report, which includes high-level survey data from up to 850 wineries of every size and style. A frequent media commentator, conference speaker, university lecturer and blogger, McMillan has served on a variety of boards and been named as one of the Top 50 Most Influential People in the US Wine Industry.

offerings in higher volumes. Fortunately, the internet became a useful sales tool, and in 2005, a change in the law opened the opportunity for wineries to sell direct between states. It was a time of market excess, because supply had caught up with demand at the time of the tech recession. Distributors left small wineries in the dust and moved to the more efficient larger accounts, and imports started taking a larger market share. Today direct sales represent 60% of the average sub-50,000 case winery’s sales, and the dynamics of the business in the 1980s bear virtually no resemblance to business conditions today.

MEININGER’S: How did you end up writing these regular reports? MCMILLAN: Quite by accident, really. One year I put together metrics for a board report and realised that I’d created valuable content. After deciding to share my thoughts with clients, I wrote a two-page email, added a couple of charts and hit ‘send’. Clients clamoured for more. I figured out how to automate financial benchmarking, added a survey component – including companies that are not SVB clients – dramatically increased research and diligence, expanded the scope, and developed worldwide contacts to draw on. It now takes three full months of research and planning, and with all that effort, we give it away free, which might be the craziest part of all.

MEININGER’S: DTC and wine clubs are the buzzwords today. How much have they changed the way wineries work? MCMILLAN: Direct sales are a radical culture shift for wineries. In the early ‘90s, direct sales were mostly out of the cellar door, with some using wine clubs as a strategy. An average winery would not have more than about 25% of their sales through direct channels. In around 2000, infrastructure developed to allow the routine connection between payment systems and websites. Wineries were slow to adopt, partly because interstate sales weren’t legally allowed until 2005, but culture was really the largest obstacle. US Wineries had no direct retail sales competencies until about 2010, and digital marketing plans were rare. The tasting room managers who often managed on-line DTC efforts might have been good with customers, but their digital skills were nonexistent. Today, DTC managers are learning their craft and being paid for their skills. The software needed to execute direct sales is starting to evolve. It’s a massively expensive proposition though. When a winery sells through a wholesaler, they get about half the revenue versus direct, but they sell a pallet, versus selling a bottle. The physical premises and salaries required for DTC are substantial. Compared to wholesale, I suspect direct sales deliver less bottom-line profit in wines at under $19.00, and probably slightly more net profit for wines above $30.00.

MEININGER’S: And why does the SVB do it? MCMILLAN: The bank does two things: we support fine wine businesses on the West Coast of the US, and technology companies and their investors worldwide. We focus on the innovation economy worldwide, so, from an asset perspective, wine looks like an outlier strategically, but the vertical focus is the same. Unlike most other commercial banks that take a generalist approach, we can give clients strategic guidance. There is no other source of wine industry information available that uses street-level information and experience to arrive at conclusions and forecasts. Wine business people realise that it’s to their advantage to be part of the SVB Report Community. Tech entrepreneurs and Venture Capitalists all seem to love wine and want to have authentic connections with our winery clients. Our winery clients love customers who enjoy the experience, can influence others, and buy by the case instead of by the bottle.

MEININGER’S: And how about the split between on- and off-premise sales? MCMILLAN: Total wine sales in US restaurants have been on the decline for a number of years. When younger consumers see an $11.00 wine by the glass and a $6.00 premium beer, they are more likely to have the beer. They are more frugal. If they see the same bottle of wine in the grocery store for $25.00 and in a restaurant for $50.00, they aren’t likely to buy it. Distributor consolidation means the major wholesalers have most of the big restaurant chains locked up. The small wineries are being shut out, and oftentimes only the large producers’ offerings end up on the chain restaurant lists.

MEININGER’S: What are the biggest changes you have witnessed in the industry? MCMILLAN: When I started, the premium wine business was a small cottage industry, run by a hodgepodge of farmers, dreamers, and professionals looking for a working retirement. Distributors sold the wine and owners made it. Direct sales were like roadside fruit stands. They weren’t particularly profitable, but they were cash businesses that held a certain attractiveness as tax-advantaged sales. Then dynamics shifted. In 1994, demand started to soar and new wineries popped up like weeds. There wasn’t enough wine to quench consumer thirst. At the same time, distributors started to see their larger accounts ask for more uniform

MEININGER’S: And how, generally, is the industry faring economically? MCMILLAN: Post-recession sales dropped rather precipitously, discounting was prevalent, and trading down was discussed as the new normal. But you can’t build a business model betting against the economy.

PHOTOS: ROBERT MCCLENAHAN

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“True luxury wines with established brands in the US never dipped because the upper 5% still had cash to spend on affordable luxuries.”

bulk juice and make blends with interesting names like Apothic. Young consumers depend on brands, just like their grandparents. What happens next? Do young consumers stick with brands, do they evolve to premium US varietals, or do they continue to experiment and move to imports that offer better value for money, particularly with a strong dollar?

The consumer market for wines versus other products is moving upmarket, and recognising this, large wineries are picking up vineyards and brands in the better regions in the North Coast of California, Oregon, and Washington through heavier mergers and acquisitions. Small family wineries without distributor partners have improved sales and gross margins thanks to DTC sales, and today, pre-tax profit is slightly below pre-recession levels but at the highest point since the 2007 fiscal year.

MEININGER’S: What is the ‘sweet spot’ for the price of a bottle of wine in the US? MCMILLAN: The segment with the most growth in total cases is $9.00 to $12.00. Smaller segments between $12.00 and $20.00 have higher growth in both cases and prices, but start from a lower base. The fastest-growing bottle today is $8.00 to $11.00 red blends, followed closely by $11.00 to $15.00 Cabernet. Above $20.00, wine is still demonstrating growth above 10% per year, but it’s more of a minefield. In the above-$20.00 segment there are virtual wineries and made-up brands unattached to terroir who can’t deliver consistency. At a point above the $20.00 price point, consumers aren’t going to support a manufactured wine.

MEININGER’S: According to some reports, the industry is now being driven by Millennials, born between 1980 and 1995. Is this true? MCMILLAN: The Millennial generation receives a great deal of ink because we are all looking for the next market. Yet when we ask wineries what percentage of their wine is sold to various generations, Millennials are near the bottom. Adding to the confusion, early in 2016 a US industry organisation came out with sensational headlines suggesting the generation was responsible for nearly half the volume consumed. Nobody believed it and the organisation amended its findings. There are no consumption statistics that I can find that suggest Millennials are responsible for more than 25% of total consumption. The Boomers in the US are still the dominant consumers, but young consumers are making an impact, particularly in lower-priced wine segments between $8.00 and $14.00.

MEININGER’S: During the recession, it was said that the days of wines selling at $200.00 or more were over. How are they doing today? MCMILLAN: True luxury wines with established brands in the US never dipped because the upper 5% still had cash to spend on affordable luxuries. They might not have consumed them conspicuously, but they still bought. Nothing has changed. The producers in the next tier down did struggle, and blended down into second labels to lower supply, but today they’re producing as much or more than pre-recession.

MEININGER’S: Do age groups approach wine differently? MCMILLAN: Younger consumers are in a discovery phase. They talk about it, research it, share it and experiment. They are ambivalent about their choice of alcohol, but know more than their parents did at a similar stage in life. But wine is daunting and they are impatient. Enter the red blend. It was similar for older US consumers, back from WWII, who never gained a taste for European wines, allowing US companies to create simple brands like Gallo Hearty Burgundy. Fast forward to the late 1970s and ‘80s when European wines dominated the shelves. Enter the ‘Fighting Varietal’, and for the past 40 years American consumers have purchased wine based on the varietal, at least until now. Red blends today are roaring ahead, making wine easier for the newest consumer to understand. No longer tied to the confusing notions of vintage, varietal and region their Boomer parents understand, younger consumers place their palates in the hands of the large companies who take good

MEININGER’S: What justifies the price of a $100.00 bottle of wine? MCMILLAN: There is a good rule of thumb in Napa: If you pay $2,000.00 per ton for grapes, you need to get $20.00 a bottle to make a sustainable profit – 20% to 30% of the finished wine. Today, very good Napa Cabernet sells for $10,000.00 a ton, which suggests a $100.00 wine. Justifying price is all about brand. Quality is a component, but a brand is built over time with consistency. People who spend that much need to trust that no matter the vintage, they are going to get a bottle that is extraordinary every time. MEININGER’S: Vineyard values vary widely across the state, and between California and other states. Are these variations sustainable? MCMILLAN: Napa is king when it comes to land prices. The difference

MCMILLAN: In high-volume production, that’s always been the game: Catch consumer demand, grow like crazy, and when the consumer moves on, milk it for as long as possible. The big entertainment companies do the same thing in film and music, and in both there are small players who are just trying to make something original and lasting.

with Napa is that the Valley is planted out. That adds value to the remaining land because it trades as an economic superior good. While current income might not justify the price, the terminal value of the asset when it’s sold typically does. The other regions aren’t the same. Sonoma has the next-highest value, but there is still some available land, though getting planting permits is a problem. After that, the Central Coast and the Pacific Northwest all play a role in expanding premium acreage needed for current domestic consumption. Oregon and Washington presently show the best price/quality metrics for wine grapes and they are growing rapidly. The Central Valley on the other hand is barely holding its price, and at times it has limited water. Generics from Fresno are out of favour and acreage is being pulled. Further north in the San Joaquin Valley sits the Lodi AVA that has adequately valued land, and produces grape quality that is useful for today’s emerging consumer price points in the $8.00 to $14.00 segment.

MEININGER’S: Mergers of distributors has been another big trend, such as the one between Southern and Glazer’s last year. How much further can that trend go? MCMILLAN: Not much further because there are fewer targets that move the needle, and fewer coverage gaps from the large distributors. But there is still some consolidation opportunity and I expect to see another major announcement in the first quarter. MEININGER’S: Californian production costs are rising because of water and labour shortages. What implications might that have for the domestic industry, and imports? MCMILLAN: While water rightfully gets a lot of coverage, the cost of grapes and availability of labour are of greater concern. Competition for seasonal farm labour is at an all-time high and wages are going up. Grape costs are rising to keep up with growing premium demand for wine. Given the strength of the US dollar and the thriftiness of the emerging Millennial consumer, imports are poised to take a larger share from domestic producers. In the past year we’ve seen examples of that with New Zealand Sauvignon Blanc and French rosé – both are up over 15% year-on-year

MEININGER’S: Mergers and acquisitions have hit the headlines, with Constellation paying $315m for Meiomi and $285m for the Prisoner brands, which come without any vineyards. How much sense do these deals make to you? MCMILLAN: Public companies traditionally have a difficult time owning premium vineyard assets. While necessary for fine wine production, owning a vineyard only lowers the current return on assets. That forces companies to focus on building brands, then outsourcing grapes and production. It works better for beer because consistent sourcing for premium wine is more variable. With brand acquisitions, the big companies look for a rapid payback, so they increase production, lower price, and then have to go further to get grapes. The consumer who bought wine before the acquisition loses interest in the non-descript offering and new consumers are needed, effectively rebuilding the brand. Ravenswood and Rosenbloom are two examples of the remnants of formerly well-respected premium brands that were pressed out on volume and down in the price segment. If the public companies made a good economic return on those acquisitions, then they make sense. Public companies don’t talk about that so we’ll never know for sure.

MEININGER’S: As an analyst, what would you claim as your greatest success? And where did you get it most wrong? MCMILLAN: My greatest success was publicly forecasting the Great Recession. Interestingly, I stopped getting speaking opportunities because the topic was so depressing. My greatest failure was my first loan 35 years ago to a little winery called Chateau du Lac in Lake County, when everyone knew wine was grown in Napa, Sonoma and Mendocino. I was fresh out of school and I said I didn’t understand the strategy or if this business was going to make it. Less than ten years ago, I sat next to that same man at an industry luncheon. We had a good laugh. He said, “A lot of people still think I haven’t made it.” I replied, “No. Kendall Jackson is a household name, so I think you’re good.”

MEININGER’S: Looking at the speed and frequency with which new brands are launched, is it fair to say that the wine industry is looking more like the entertainment industry?

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“My greatest success was publicly forecasting the Great Recession. Interestingly, I stopped getting speaking opportunities because the topic was so depressing.”

INTERVIEW U S B A N K S TAT I S T I C S

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THE US MARKET AT A GLANCE Data from the Silicon Valley Bank shows that Boomers remain the most profitable cohort of the population, despite all the noise about Millennials. It also shows how profitable the US market remains. Average Direct Sales Based on Production Size

Percent Of Wine Sales Direct Based on Avg Bottle Price

70%

60%

50%

40%

30%

20%

10%

12,500

2,501 5,000

5,001 10,000

10,001 25,000

25,001 50,000

Average Direct

50,001 100,000

100,001 250,000

> 250,000

< $15

$15 $19

$20 $29

Export

$30 $39

$40 $69

> $69

% DTC

Channel Shift to DTC Sales

Percent of Revenue from Restaurants by Production Size

61%

50%

59%

40%

57%

30%

55% 20% 53% 10%

51%

49% 47% 2012

2013

2014

2015

12,500

2,501 5,000

5,001 10,000

10,001 25,000

2016

25,001 50,000

2014

50,001 100,000

2015

100,001 250,000

> 250,000 Average

2016

Annual Changes In Cohort Share of Market

Average Direct Sales Based on Production Size 60%

Premium Wine

50%

50% 40%

40% 30%

22.3% 2.0%

-3.8%

10.8% 12.2%

7.7%

9.2%

11.9%

8.8%

8.7%

Pretax Profit

16.3% 9.5%

2.2%

6.7%

6.9%

6.6%

8.0%

9.6%

11.4%

41%

44%

41%

33%

32%

6.1%

Millennials (Ages 22-38)

Gen X (Ages 39-50)

2012

2013

2014

Boomers (Ages 51-68)

2015

2016

Matures (Ages 69+)

SOURCE: THE SILICON VALLEY BANK

Sales Growth

11%

57.1% 55.3% 52.4% 53.7% 53.2% 53.4% 54.8% 56.8% 56.9% 57.6%

10%

Gross Margin

15%

6/30 2016

13%

12/31 2015

14%

12/31 2014

29%

12/31 2013

29%

12/31 2012

17%

12/31 2011

16%

12/31 2010

14%

12/31 2009

14%

12/31 2008

13%

12/31 2007

28%

20%

0% -10%

44%

10%

43%

30%

20%

Leading Wine Brands from the New World

William Hardy Winemaker Hardys

Ondine Chattan Winemaker Geyser Peak

Gerhard Swart Winemaker Flagstone

Cleighten Cornelius Winemaker Mud House

Craig Stansborough Winemaker Grant Burge

Paul Lapsley Winemaker Australia

Drawing on a proud heritage with one of the first wineries established in Australia, Accolade Wines has evolved into a global wine company with some of the world’s best-known brands sold in over 130 countries. Today our portfolio comprises of more than 35 wineries and brands from premium regions in Australia, New Zealand, South Africa, Chile and California. This broad portfolio, together with the largest wine bottling, warehouse and distribution centre in Europe, and more than 1.700 dedicated people, makes us one of the world’s leading providers of New World premium, commercial and value wines.

We look forward to welcoming you to our stand! 19 - 21.03.2017 Messe Düsseldorf Hall 9 / J06 Please drink responsibly. www.accolade-wines.com

POWER LIST UK DISTRIBUTORS

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NOTABLE UK DISTRIBUTORS The UK market remains a beacon, attracting wines from across the globe. Adam Lechmere discusses some of the country’s most important distributors.

he roll call of UK distributors has never looked so interesting – and this in an age of consolidation, when one company, Conviviality, can command a near monopolistic chunk of the market. Any journalist or sommelier has a diary packed with tastings; the only difficulty is getting to them all. To choose 50, using any criteria, would be difficult enough. To choose a mere 10 is near impossible. Although some of the biggest distributors in the country have been included, this is not a ranking by size, or turnover, or even by reputation – it’s a list of companies which are impressive by virtue of the wine they sell. In the end, that is the only criterion.

Conviviality Between October 2015 and the following May, the Bargain Booze and Wine Rack owner Conviviality Retail gobbled up Bristol behemoth Matthew Clark and the huge Bibendum PLB group. Together with events bar companies like Peppermint (swallowed at the same time) and Wandering Wine Company (which came with Bibendum), and 716 retail stores, Conviviality has terrifying heft. It has 17% of all listings in the country – which means one in five wine lists. Its vertical integration is comprehensive. It serves 23,000 outlets from grand hotels to pubs, and through Bibendum, and Walker & Wodehouse (which inherited a royal warrant), it lists boutique and artisan wineries from Galicia to Tasmania. This is a work in progress – the dust hasn’t settled yet.

Les Caves de Pyrene In 1988 it was three people, a van, and a handful of wines from Southwest France. Today, Les Caves de Pyrene has a turnover of £26m ($32.5m), a 1,500-strong list, and sells to over 600 restaurants, retailers and wholesalers in the UK; there are offices in Spain and Italy, as well as a clutch of restaurants in London, Rioja and Melbourne. There is also London’s Real Wine Fair –

Eric Narioo, founder of Les Caves de Pyrene

Troy Christensen, CEO, Enotria&Coe

one of the biggest artisan gatherings in the UK. Founder Eric Narioo, rumpled but indefatigable marketing chief Doug Wregg, and the team of buyer-shareholders are champions of the independent, the artisan and the esoteric. Their choices reflect enthusiasm rather than commercial viability, and for that they are much loved by sommeliers and independent merchants. “We’ve never followed trends or chased business,” Wregg says. Instead, the business has come to them.

big breweries, a group could buy in bulk, which was especially important when the New World started shipping in the late ’80s, and supermarkets took off. “Economy of scale is our raison d’être,” chairman James Tanner says. Key agencies are New Zealand’s CJ Pask and Alan McCorkindale, Gouguenheim of Argentina, and Mitchell Wines of Clare Valley. There are now 20 members from Devon in the south to Inverness in the north of Scotland, including major merchants like Tanners, and Haynes, Hanson & Clark, selling around £6m of wine, 70% of it New World, and almost all of it exclusive to the group. It’s by no means the biggest distributor, but in terms of extending its reach into the remoter parts of the country, Merchant Vintners has influence.

Enotria&Coe Enotria&Coe is a very different company to the Enotria Remo Nardone founded with a handful of Italian wines (Fontanafredda, Umani Ronchi and Fattoria dei Barbi are still stalwarts) in 1972. He sold to a venture capitalist in 2005; ten years later, after major investments under the leadership of Troy Christensen, Coe Vintners was acquired. Enotria&Coe now turns over £150m to £200m, employs 300 staff, and sells 6,000 different lines, 250 of them exclusively. Enotria&Coe doesn’t have the pizzazz of Liberty, but buyers like its strong commitment to the artisan. “They also have a fabulous spirits list,” says master sommelier Gino Nardella of the Stafford Hotel.

Merchant Vintners Merchant Vintners was founded in 1966 by John Townend of the long-established Yorkshire wine merchant House of Townend. Concerned about the increasing power of the

Boutinot Wines Everyone knows the name. Established in 1982 and now the UK’s third-biggest distributor by listings, Boutinot sells 50m bottles a year, more than half of which it produces itself, in Burgundy, Piedmont, the Rhône and South Africa, among others. After a management buyout in 2013, the company doubled its staff, and now employs 143, including five winemakers, a master blender, two MWs and an MS. Witty innovations like the Camper Vin bag-in-box have been added to a list including key agencies like Cave de Tain l’Hermitage and Cave de Turckheim. The wine industry nowadays is “more complicated and complex”, part-owner Michael Moriarty has said. It seems likely the wine business is going to hear a lot more from Boutinot.

Liberty Wines The noise at a Liberty tasting is indescribable – a sweaty pack of buyers and journalists elbowing their way round dozens of laden tables. At the centre of it all is the courteous figure of David Gleave MW, who started 20 years ago with four people and now employs 130; he sold £45m of wine in 2016. The 300 agencies and 1,500 premium wines include the multinational Sogrape, which joined last year, as well as deep offerings from the rest of the world (Spain is especially rich, as is Burgundy). But Gleave started as an Italian specialist (there are over 370 offerings) and is proud still to be thought so. The secret? “We provide the right wine to the right place at the right time and price,” he says. Simple, really.

an upstairs room in Westminster Abbey to announce the Champagne house’s purchase of 69 ha of vineland in southern England.

Berry Bros. & Rudd It is both ancient – it has occupied its premises in St James’s Street, Piccadilly, since 1698 – and modern (the real business happens 50 miles away in a utilitarian business park). But there’s nothing old-fashioned about Berry, Bros. & Rudd. It launched its website in 1994 and was an early adopter of online trading with its BBX platform. Family-owned, it has 442 agencies and exclusive suppliers, turns over £145m a year, and has a warrant to supply both Her Majesty the Queen and Prince Charles. There have been difficulties – in 2013 it posted losses of £7.3m, and there were problems with its long-term Chinese partner, all on top of the spectacular collapse of the Bordeaux en primeur market which in its heyday was bringing in £60m a year. After a major shakeup across all divisions, culminating in the appointment of new CEO Dan Jago, BB&R sails on, its aim always to be “the closest link between those who make the wine and those who drink the wine,” as the 19th century director Charles Walter Berry used to say.

With thanks to Peter McAtamney, principal of Wine Business Solutions, for help in compiling this list. W

TEN WORTH MENTIONING Flint Wines Fantastic Burgundy list, exciting newwave Americans. Indigo Wine Agenda-shifting artisanal importer. Possibly the best Spanish list in the UK. New Generation Wines Constantly surprising and imaginative, especially in France and Italy. Carte Blanche Wines High-quality artisan and bio, the South of France, Loire, Spain. Roberson Wine Now online-only, deep and imaginative buying, especially in modern California, still excites. Negociants UK Yalumba-owned, preeminent Aussie and New Zealand list.

Hatch Mansfield Taittinger, Errázuriz, Villa Maria, Kleine Zalze, Cune… Hatch Mansfield has 15 producers on its books, and each of them is of world renown. There are three shareholders – Patrick McGrath MW, Louis Jadot, and the premium Chilean winery Errázuriz – running an £80m-turnover company selling 1.5m cases of wine to all sectors of the trade, national, regional, off- and on-trade and travel retail. Criteria for becoming a Hatch brand are simple – “they must have heritage, authenticity and provenance,” which in practice means they are family-owned, own all their vineyards, and control the wine from vine to bottle. McGrath is an unassuming figure but he understands publicity. Just over a year ago he and Pierre-Emmanuel Taittinger made national headlines when they hired

Mediterranean portfolio the envy of companies twice its size. There are holes – the American list uninspiring. But Hallowed Ground was taken on precisely to rectify a gap in Australia, and you can be sure managing director Andrew Bewes has his eye on California.

Berry Bros. & Rudd has occupied premises in St James’s Street, Piccadilly, since 1698.

Gaucho Does one thing and does it best: Argentina.

Hallgarten Druitt & Novum Wines

Accolade Wines Biggest in the UK and Australia, fifth biggest in the world. Range of top New World producers.

In 2016, Hallgarten Druitt & Novum bought the Australia and New Zealand specialist Hallowed Ground’s Australia list, including such gems as Teusner and Fox Gordon. It had done the same with another niche importer, Novum Wines, in 2010, thereby securing highly respected Steve Daniel as head of buying. With those two canny moves, in six years Hallgarten (turnover is £46m with 185 exclusivities) has transformed itself from a solid if humdrum importer to a dynamic player with an electric range of wines – its Greek and

The Wine Treasury Old-fashioned but un-ignorable on California and Oregon. Armit Wines Château Lafleur, Gaja, Sassicaia, Leflaive, Huet… and that’s only the start of the list.

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Berkmann Wine Cellars One of the marks of a good distributor is the density of the crowd around their table at tastings, and Berkmann always attracts a scrum. A second-generation, family-owned company, it turned over £66.5m last year, and while it can appear old-fashioned, its 96 exclusive agencies show a list which continues to be built with confidence and imagination. It includes household names such as Antinori, Duboeuf and Joseph Phelps, and lesser-known but fascinating producers such as Alto Adige’s Hofstätter or Martinborough’s Julicher. Sommeliers love them – Berkmann has been named Great Value Wine Merchant of the Year four years in a row at the Sommelier Wine Awards.

WHO IS WHO FRANCE

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WHO’S WHO IN FRANCE

rance remains the epicentre of the wine industry. According to Vin et Société, it has 10% of the world’s vineyards and produces 17% of its wines, including the vast majority of the most illustrious labels. The wine sector employs some 550,000 people and represents roughly a sixth of the nation’s total agricultural income. All these figures, however, conceal a number of long-term trends that are less than reassuring. Competition in export markets is becoming steadily more fierce, with Chile’s and Australia’s free trade agreements with China jeopardising France’s traditional dominance in that country, for example. Domestically too, wine is a decreasing part of the Gallic daily diet. According to AgriMer figures, between 1980 and 2015, the proportion of the adult population who classed themselves as ‘regular’ wine drinkers plummeted from 51% to 15%. Efforts have been taken to redress this situation, including the creation of a Vin de France designation allowing varietal labelling on high-volume production wines that makes French wines simultaneously more competitive in export markets and more attractive to younger French consumers. The explosive recent growth in the consumption of rosé, which now outsells white in French supermarkets, and the unprecedented success of fruit-flavoured wines, have both coincided with a dramatic reduction of the number of French women who said they ‘never’ drank wine from 47% in 2010 to 39% 2015. However, the presidential elections this spring could bring new challenges. In a globally turbulent political moment, France is for the first time approaching a contest in which the far right Front National candidate, Marine Le Pen, has a better-than-outside chance of taking power. Le Pen is avowedly antagonistic to the Euro, and her manifesto includes a promise to hold a Brexit-style referendum. Her campaign also has to be set in the broader context of the politicians in neighbouring countries whose nationalist/ isolationist views she shares. If both Le Pen

and Geert Wilders, the popular far right Dutch politician, were to come to power this year, the frictionless trade of wine between European markets could be seriously at risk. One could easily imagine a free trade agreement between Holland and South Africa, for example. Other major casualties might include bestselling domestic brands such as Castel’s La Villageoise, Vieux Papes and Cambras, all of whose wines include ‘blends of wines from the European Community’. Among the French men and women who would celebrate an even partial closure of Gallic doors to bulk imports from neighbouring countries would be the members of the Comité d’Action Viticole (Wine Action Committee). This shadowy group that was previously known as CRAV was founded in 1970, and has been responsible for numerous terrorist attacks on French wine businesses thought to be involved in importing bulk Spanish wine.

Significant officials France’s wine industry is still very centrally controlled, and in the case of its premium and super-premium sectors, decisions are still taken by the Institut national de l’origine et de la qualité (INAO) and rubber stamped by the Minister of Agriculture. In January 2017, Jean-Louis Piton, a winemaker from the Languedoc, took over the presidency of the organisation. During his next years in office, as a producer of both appellation contrôlée and non-appellation IGP wines, and as former director of a major cooperative, Piton is expected to be particularly sympathetic to the needs of wineries in the south and south-west of the country.

Marketing For many members of the wine industry outside France, the marketing organisation whose name will first spring to mind is probably Sopexa. But this PR company, which was once synonymous with promoting all

PHOTO: GENARO BARDY

Noted expert on French wines Robert Joseph introduces the people who drive one of the world’s most significant wine countries.

Jean-René Buisson, CEO, Sopexa

French wine generically as ‘Food & Wine from France’, has metamorphosed since its privatisation in 2008. Today, it describes itself as an ‘International Marketing & Communication Agency’ for ‘food, drink, lifestyle’. While it represents regions such as Chablis, Burgundy and the Loire, and corporate clients such as Carrefour and Castel, it has to compete for French vinous clients with a wide array of other companies. Under Jean-René Buisson, its CEO since 2013, Sopexa is generally thought to be a more dynamic organisation than in the past.

Significant sommeliers To judge by the results of last year’s Meilleur Sommelier de France competition, the best wine service professional in France is Gaëtan Bouvier of La Villa Florentine in Lyon. The most influential sommelier, however, is probably Patrick Fracheboud. The La Bonne Franquette restaurant in the heart of Montmartre in Paris, where he works in the setting for regular meetings of the cream of la sommellerie française.

Significant buyers As in many other countries with developed wine markets, most of France’s wines are sold in supermarkets, especially the grande surface hypermarkets that the French helped to pioneer. Among these, the most influential is often said to be the Carrefour chain, whose

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Nicolas, originally founded in 1822, has more than 500 shops worldwide.

this field is Vente-Privée, an online flash sales retailer founded by Jacques-Antoine Granjon in 2001, that introduced wine four years later and now has a turnover of around €30m. As with its fashion offerings, the site majors

on brands – inasmuch as the word can be applied to wine – rather than the private-label model that is often favoured by this style of company. The head of the wine department is Emmanuel Imbert. Chasing hard, though, are Patrick Bernard’s Bordeaux-based Millésima, which was launched in 1983 as a mail-order business, and Wineandco, in which it has a 50% share alongside LVMH. Both businesses’ combined turnover rivals that of Vente-Privée. Bernard, whose cousin Olivier is owner of Domaine de Chevalier in Pessac Léognan, often features in press reports on the Bordeaux market. Another member of a famous Bordeaux family, Angélique de Lencquesaing, also frequently appears in the media, as head of the online auction site iDealwine, which she co-founded together with Lionel Cuenca and Cyrille Jomand.

Angélique de Lencquesaing, iDealwine.com

Critical opinion As elsewhere, wine critics are losing their influence in France, but arguably more slowly than in the UK. A mention by a columnist in one of the main newspapers can still help to boost sales significantly. The best known of these is Jacques Dupont, who has been reviewing wine for the weekly news magazine Le Point for over 25 years. Another name worth noting is Philippe Barret, editor of the quarterly Le Rouge et Le Blanc newsletter. The undisputed ‘Robert Parker of France’, however, is Michel Bettane, who has metamorphosed from prominent contributor to La Revue du Vin de France magazine to joint publisher – with his old boss at the RVF, Thierry Desseauve — of Le Guide des Vins de France. The ‘Bettane and Dessauve’ brand now covers a wide range of activities, ranging from curating sets of exhibitors at trade shows to helping companies put together wine lists.

PHOTO: FABRICE LESEIGNEUR

shops now come in a wide range of sizes. The range of wines on offer will depend on the region in which the shop is situated, but overall decisions are made a team headed by Didier Thibaud. Given its power as a buyer, the chain’s recent growing focus on organic produce is likely to have an impact on French viticulture. Also influential at the higher end of the price scale is the family-owned E.Leclerc chain, whose founder, Edouard Leclerc, created the concept of the Foires aux Vin – retail in-store wine fairs – at which prestigious wines, including first growth Bordeaux, are sold at dazzlingly low prices to entice buyers into the stores. Inevitably, questions are asked about how these prices are possible. Is the chain, which is now run by Michel-Édouard Leclerc, the founder’s son, selling the wines at a loss? Have the producers used the retailer as a way to dump stock? Or have the wines been purchased on the grey market? A few years ago, one high-profile producer, the late Etienne Hugel, publicly took E.Leclerc to task for the way it was advertising heavily discounted bottles of his company’s Alsace. France’s leading specialist wine retailer, with around 500 shops, is still Nicolas, a business that was originally founded in 1822. Today it belongs to the giant producer Castel and is run by Alain Castel, nephew of Pierre Castel, the company’s founder and CEO. Online shopping is growing rapidly in France: in 2016, it represented €72bn ($76.6bn), up from €65bn the previous year – and Nicolas is clearly aiming to take advantage of this trend. However, the heavyweight champion in

Michel Bettane and Thierry Desseauve, wine communicators

Significant producers When people discuss the most-influential wine producer in France, Pierre Castel’s name is inevitably one of the first to be mentioned. The eponymous family-owned business was founded in Bordeaux in 1949, and its Baron de Lestac, Malesan, Roche Mazet, Vieux Papes et La Villageoise brands have a huge market share in France. In export markets, however, Joseph Helfrich’s Les Grands Chais de France has a broader impact. The firm he launched in 1979 now exports around 17% of all of France’s non-sparkling wines. No one who has visited a major trade fair across the world can fail to have noticed the company’s imposing stands and their wide array of products. And that is what sets what is still very much a family business apart. Its range includes everything from the ubiquitous bestselling JP Chenet, whose quirky twistedneck bottles are recognised by consumers in over 140 countries, to single-vineyard Alsaces and Loires. Les Grands Chais is also in the Bordeaux business, thanks to its acquisition of negociant companies Eschenauer, Dulong, Calvet, Alexis Lichine and Cruse. W PHOTO: CATH LOWE

1/17 MEININGER’S WBI

WHO IS WHO FRANCE

Joseph Helfrich, founder, Les Grands Chais de France

HIGH VALUE BRANDS F. W. Langguth Erben GmbH & Co. KG · 56841 Traben-Trarbach · Germany www.langguth.wine · www.bluenun.wine · www.erben.wine · www.medinet.wine · www.sontino.de

WINE STYLES PROVENCE

1/17 MEININGER’S WBI

PROVENCE ROSÉS ARE BLOOMING

PHOTO: ZM_PHOTO - FOTOLIA.COM

Provence is experiencing a lucrative boom that other wine regions can only envy, says Dr Jamie Goode. And it’s all been driven by pink wines.

By the numbers Since 2001, export sales have increased, and in the last few years have taken a sharp turn upwards in key markets. From 2001 to

2015, volumes of exports trebled (303%), and value rose eightfold. The average ex-cellars bottle price rose from just over €1.50 ($1.60) to €4.29. This has been driven by a global rise in interest in rosé and its association with the positive image of Provence – it’s a simple, clear marketing message. In 2015, export sales rose 31% in volume, and in the first six months of 2016 they rose 25%. Prices and value are also following this trend. Other wine regions must be watching with intense jealousy. The US is the largest market, with 36.5% of the volume and 44.5% of the value. The UK comes in at third with 10.7% and 9.5% volume and value. Both are showing significant growth, with year-to-date volume increases of 42% and 34%, respectively. In second place sits Belgium, with 10.9% by volume and 6.9% by value, although this market is quite static. Australia and Germany are also important, fast-growing markets. In contrast, the French market is struggling, and export is driving the region’s success. In France, where more rosé is consumed than white or red wine, Provence is in danger of losing market share to cheaper pinks from the Languedoc. With the success of rosé have come the boats. Mark Dixon of Château de Berne has Elena, a 55-m racing schooner that’s an exact replica of a 1911 boat, built in 2009. Dixon is an entrepreneur who left school at 16, and in 1989 set up office space rental PHOTO: SIMON WOOLF

alfway through a vineyard tour at Château Léoube, the guide, winemaker Romain Ott, gets a call on his radio. He stops, turns back the Land Rover Defender, and heads for home. “I’m sorry,” he explains, “but the owner is here and wants to meet with me.” The owner in question is Anthony Bamford, who owns the construction equipment manufacturer JCB, and whose net worth is reported by Forbes as being $1.96bn. Later, the tour resumes and reaches the top of the property, with a view out to sea. Léoube owns 4 km of prime Provence coastline, and just off shore there’s a huge yacht parked, in front of a grand residence – it’s Bamford’s 204-ft (62 m) motor yacht, ‘Virginian’. “Please don’t photograph those,” the guide asks. Provence is proving to be a magnet for wealthy people who want to spend some cash on a wine estate. It’s always had the glamour factor, with the likes of Cannes and Saint-Tropez, and their marinas chock full of expensive yachts, but of late those who have parked their money in wine estates have also been able to ride the wave of rosé. Pink wine is on a roll at the moment, and it’s Provence that produces the most sought-after rosés of all.

company Regus. When it was floated in 2000, its valuation was $1.9bn, and at the time he had a 60% stake. Since Dixon bought the estate in 2007, he’s grown it from 60 ha to 117 ha of vineyards, and also added a couple of other domains, bringing the area of estate vineyards to almost 300 ha. The focus is rosé, as with most estates in the region, although they have initiated a red wine collaboration with Saint-Émilion-based consultant Hubert de Boüard. “The demand today is just for rosé,” says Thomas de Lagarde, general manager in charge of wine (there’s also a luxury hotel complex). “When people are here they drink the whites and the reds and think they are fantastic, but the market is only rosé.” Three years ago, de Berne exported just 10% of production; now it’s 30%. Of the 70% sold domestically, 40% is retail, 25% is on-trade, and 5% direct sales. De Berne found out by accident that the market for Provence rosé welcomes innovation in bottle shapes. De Lagarde jokes that the square bottle shape that they use for some of their wines, very successfully, is a tribute to the square towers of the house. The real story is somewhat different. They were making a Viognier, but it wasn’t selling very well. “So we put it in a square bottle with a glass top and it sold out,” he recalls. The rules are indeed different in Provence. It’s the one region where there is When it comes to Provence A-listers, none glitter as brightly as Angelina Jolie and Brad Pitt, co-owners of Château Miraval since 2008. Their first rosé (the 2012 vintage) sold out within hours of its release and has continued to do well. One of the first questions the tabloids asked when the couple split in 2016 was, who will get the Château? So far, there has been silence.

€7.0

€/750ml, containers

€6.88 €6.34 €5.71

€6.0

€5.16

€5.0

€5.06

€5.00

€4.89

€4.82

€4.68

€4.61

€4.45

€4.42

€4.41

€4.33

€4.0

Volume of rosé wines in 2015 8m

Australia

Mauritius

Norway

Canada

Austria

Ivory Coast

China

Spain

Bulgaria

Singapore

USA

€0.0

Russia

€1.0

Hong Kong

€2.0

UAE

€3.0

Litres

7.8m

7m 6m 5m

and the best wines age longer. Provence is different, and it’s part of the success of the region.” The fact that even the best wines get to market quickly improves cash flow in a capital-intensive industry. De Lagarde emphasizes that its success is largely pull, not marketing push: “The success of Provence has come from consumers themselves, not sommeliers.” He also thinks part of the recent success is because of gains in quality. “Twenty years ago Provence wines were of average quality,” says de Lagarde. “We’d have to add lots of sulphites to get a stable wine. Provence moved up first because it improved wine quality.” He cites factors such as better pressing, cooling systems, trellising and applied research as factors that have contributed.

The Garrus effect

4m 3m

2.35m

2.3m

1.48m

1.16m

1.14m

SOURCE: CIVP

1.11m

599,902

326,722

323,042

Canada

Australia

Denmark

0m USA

Belgium

Sweden

Switzerland Netherlands

successful innovation with wine-bottle shape. Other regions have tried and failed, or have only succeeded on a very limited scale. In Provence, specialist bottles seem to

Germany

be the norm, and consumers embrace them. “Provence is an outsider,” says Alexis Cornu, de Berne's newly hired winemaker. “Other regions are built on wines that can age,

Sacha Lichine may not have as much money to play with as some of the richest in the region, but after the sale of his Bordeaux property Château Prieuré-Lichine in 1999, he had enough to purchase the mid-19th century Château d’Esclans for €13m. Lichine has been clever in his branding and ambitious in his pricing. When he started out, the most expensive Provence rosé was Domaine Ott, retailing at around €30.00. His top wine, Garrus, was launched at €100.00. Made from a block of 70- to 100-yearold vines, it’s made in a Burgundian style

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Average price of Provence rosés in 2015

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WINE STYLES PROVENCE

under the direction of consultant winemaker Patrick Léon, who adapted a special cooling system so it would work in barrel, allowing for temperature-controlled barrel fermentation. The success of Garrus has raised the price bar for Provence rosé. But as well as his pricey estate wines, Lichine also began making a partnegociant wine, Whispering Angel. Last year, 3.3m bottles of this beautifully packaged wine were sold, and this year the hope is to take this past 4m, with a goal to reach 7m in a few more years. The success of the €100.00-bottle of rosé, unthinkable in the past, has raised the price ceiling for all the aspirational producers. And Whispering Angel has shown that a good product, stylish packaging, and skilled

marketing makes a €15.00 negociant wine in large volumes possible.

A wine of terroir? While Provence rosé is widely regarded as a wine of style, driven by fashion and winemaker intent, rather than terroir, some are setting out to challenge this idea. Now there is a move to delineate specific sub-regions in Provence on the basis of terroir. If the wine can be linked to place, it cannot be copied. In some ways, there are parallels with Champagne. Champagne has powerful branding, but there’s something about the region’s soils that helps make compelling wines that have proved hard to emulate.

Evolution of rosé exports by volume

2010

Other 12.9%

2015

Australia Japan 0.6% 1.1% Canada 5.6% Netherlands 7%

Other 14.8%

Australia Canada 1.5% 2.8% Germany 5.2% Netherlands 5.3%

UK 9.3% Switzerland 5.4% Germany 11.4%

Belgium 22.9%

Sweden 6.9%

UK 10.7%

USA 36.5% Switzerland 13.3%

USA 15.9%

Belgium 10.9%

Evolution of rosé exports by value

2010

Other 14.1%

2015

Japan Luxembourg 1% 2.5% Netherlands 7.1% Canada 8%

Other 16.1%

Australia Canada 1.6% 2.9% Netherlands 4.3% Switzerland 4.3% Germany 4.6%

UK 8.7%

USA 24.6%

Sweden 5.3%

Germany 9.3%

SOURCE: CIVP

Belgium 6.9%

Belgium 14.7%

Switzerland 10%

USA 44.5%

UK 9.5%

The Syndicat des Côtes de Provence has been studying the different terroirs of the appellation of Côtes de Provence. There are 84 communes in the Côtes de Provence in three Départments. In this big territory, there are sub-regional differences, and this is what they are trying to tease out. Currently, the classification has two levels – regional and subregional. The goal will be to develop these subregions into regional AOCs, and then to add sub-regions to these. The job of the syndicate is to prove to the INAO that the terroirs are specific and result in different wines. So far, there are four sub-regions recognised: Sainte Victoire (established 2005); Fréjus (2005); La Londe (2009) and Pierrefeu (2013). The next one looks like it may be Notre Dame des Anges. If the wines from these sub-regions are recognised as having different qualities by consumers, this would be a way of adding interest and value. “Soils matter,” says de Berne’s Alexis Cornu. Their lower properties, at sea level, have acidic granites and sandstones, giving richer, slightly salty wines – whereas the de Berne property, which is at 300 m with Jurassic limestone soils, gives fresh, fragrant wines. “We can make completely different wines because we know our terroir,” he says. “But both terroir and style of the maison matter. The challenge over the next few years is to build the de Berne style, but also to show the different estates.” De Lagarde agrees, “You need to stay true to your style, but we don’t make the wines for ourselves – we have too many hectares to do this. We make the wines for consumers.” He gives an example, “Today there is great demand for thiol-dominated wines. Consumers like the grapefruit nose. Here we try to see if we can introduce a bit of this character, but we stay in the style and structure of de Berne.” Back at Léoube, there is a tasting with Romain Ott. While this estate may have begun as a rich person’s plaything, it is clear there’s something special about these wines. There’s a texture and personality to them, no doubt a combination of the thoughtful winemaking style of Ott, and the soils and climates of the La Londe sub-region. “Provence is the leading producer of rosé because it is our main product,” says Ott. “We are really careful with the quality. Provence is the only region where rosé is 80% of production. Except in Provence, rosé has always been a second product. In Provence, it is our white.” W

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SPECIAL REPORT THORN-CLARKE

Thorn-Clarke has a lot to celebrate It was just 30 years ago that the first Thorn-Clarke vineyard was planted. Since then, the family-owned company has become a Barossa powerhouse.

he Thorn-Clarke winery is celebrating 30 years since husband and wife David and Cheryl Clarke (née Thorn) planted their first vineyard in South Australia’s Barossa Valley in 1987. Together with son Sam and daughter Nicole they have built one of the success stories of the region: a winery that enjoys excellent trade and consumer support for its wines, now exported to more than 20 countries.

DEEP BAROSSA ROOTS Cheryl Clarke’s family, the Thorns, have been Barossa grape growers since the 1870s; ‘Clifton’, the Thorn family property is now owned by one of Cheryl’s brothers. Clifton has one of the oldest Shiraz vineyards in Australia and, possibly, the world; records show this block was in existence in 1854 and was one of the region’s first vineyard plantings. David Clarke’s family were pioneers in the Barossa as well, most famously in gold mining at the Barossa Goldfields from the 1870s onwards. Since the original 1987 planting, the family has established another three

vineyard sites across the Barossa and Eden Valleys and has become one of the region’s largest vineyard owners, with 260 ha under vine. The combination of significant vineyard holdings, a centrally located winery and a talented team has ensured that Thorn-Clarke has been recognised by critics and judges across the globe. Winning the 2015 International Wine Challenge Trophy for ‘Best Shiraz / Syrah of Show’ for the 2012 Ron Thorn Shiraz was a particular highlight. Australian wine writer James Halliday has again awarded the winery his highest ‘Red Five Star’ rating in the 2017 annual Halliday Wine Companion. While the Barossa is renowned for big and powerful Shiraz wines, Thorn-Clarke aims for complexity and elegance, which requires getting the vineyards right. Once the vineyards are harvested, the winemaking teams

use the different terroir expressions to their advantage. “The winemakers spend enormous amounts of time tasting the wines and perfecting blends,” says Sam Clarke. “Our yeast and oak philosophy is simple: they should add to the complexity and balance of the wine, but not dominate it.”

CONTINUOUS TRIAL AND ERROR Today, Thorn-Clarke has four separate vineyard estates across the region and delivers reliability and continuity of quality across its entire portfolio. Probably the biggest endeavour taken on by the family in recent history has been the expansion of its winemaking. “For me, the greatest joy has been to see so much of our hard work and endeavour expressed in a beautiful bottle of wine,” says Cheryl Clarke. “The most gratifying of these achievements was the launch and success of our Ron Thorn Shiraz which we named in honour of my father, Ron Thorn, who worked for over 50 years tending his vineyards.”

To find out more about Thorn-Clarke and its wines, email: thornclarke@thornclarke.com.au www.thornclarkewines.com 46

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N E W S A N A LY S I S SOUTH AFRICA

1/17 MEININGER’S WBI

WHEN EXPORTING IS A DUBIOUS STRATEGY South Africa is in the middle of an export boom for its wines. But is it yielding profits? Michael Fridjhon looks at the economic reality.

he growth of South African wine exports in the years which followed the country’s first democratic elections (1994) has been impressive. Volumes have increased from an annual 20m L in 1990 – when Nelson Mandela was released from prison – to almost 500m L today. The country’s winemakers have become citizens of the world, and are more likely to be seen hosting a wine tasting in London or New York than presenting their wines to local audiences in Johannesburg or Durban. Given the current political and economic situation in South Africa – a far cry from the all-pervasive optimism of the Mandela era – the export triumph of Cape wine has become something of a good-news story to which cling publicists (as well as the wine industry itself) – rather like shipwreck survivors clutching planks and flotsam on storm-tossed seas. Perhaps this is the reason that no one is driven to unpack the figures to determine just how successful this whole enterprise has been. Year-on-year growth in export sales has become something of an industry mantra, and while it is recognised that a significant percentage of what leaves the borders travels in bulk containers, the sense that Brand South Africa is making inroads in the wine markets of the world has been something of a sustaining myth. For most of this time the local market has been stagnant, so to be able to travel to far-flung places and bring home evidence that Cape wine is making progress has been important for the national psyche. Lately however, exports have slowed, and in the past year or two there have actually been small reversals of the trend. It seems reasonably clear that volumes have peaked, and that the challenge now is to increase the value, rather than the volume component of the trade. However, it is here that evidence is being gathered suggesting that most of this much-vaunted business may be little more than a mirage.

devaluation of the South African Rand. In In the early days of the export boom it 2007, ₤1.00 cost R14.00. Today, despite was widely acknowledged that what was Brexit, it costs nearly R17.00. Whether brand being sold abroad was destined for the owners can continue to bank on currency lower-priced segments. The isolation years decline to compensate for this of the 1980s had seen very few loss in income is a matter of new plantings. The red-to-white some doubt. Over the past 10 ratios were totally wrong (oneyears, the Rand-Sterling rate third to two-thirds) and the has fluctuated between R10.00 varieties themselves had little and R24.00. While the longinternational appeal. It took term trend has been downward, more than 10 years to achieve there have been protracted a reasonable balance in the periods where the Rand has vineyards and to have more either strengthened or held marketable product. But that its own. With no real prospect was 15 years ago, and while of an increase in the hard volumes have continued to “Instead, with currency income, producers grow – mainly, it would seem, roughly half the have become addicted to the as a result of the replanting industry losing devaluing currency to make programme – values have money, or at best up for the impact of domestic remained resolutely low. breaking even, the inflation. Some of the highThe average on-shelf price export fantasy still volume exports are, at best, for Cape wine in the UK (the holds sway.” break-even and, possibly, for country's most important export higher-cost producers, yield an market by volume) has edged actual loss on the selling price. up 15% over this time, but still Michael Fridjhon, The discovery that exports are hovers under the ₤5.00 ($6.30) wine expert and not a panacea for producers has mark. Over the same period, visiting professor, Graduate School of begun to introduce a jarring increases in duty and VAT have Business, University sense of reality to the formerly been significantly higher than of Cape Town upbeat mood. the movement of the retail Part of the problem is that price point. In fact, it’s widely roughly two-thirds of all exports are sold in recognised that producers are banking bulk, making this component of the offshore less money (in hard currency) from these trade merely a surplus disposal arrangement sales now than they did at the turn of the to replace the function performed up to century, despite the apparent increase in the the mid-1990s by the KWV. There’s no on-shelf price. The standard calculation for meaningful revenue for any high-quality winery income 15 years ago was to attribute producer at the price point of the bulk wine just under 30% of the UK retail price as the trade. Of the remaining exports, some goes in producers’ share. Nowadays, with increased bag-in-box (Sweden is an important market) transport, handling, and storage costs, as but only 137m L leave the country in glass. well as statutory imposts, the figure is closer The most important customer here is the UK, to 20%. accounting for 30m L, followed by Germany Producers would have been more sensitive (18m L) and the Netherlands (14m L). The to what was happening, but for the continued

1/17 MEININGER’S WBI

US comes in at 9.6m L, China at 8.6m L and Canada at 7.7m L. It is these figures, and their relationship to the domestic market sales, which have had such a sobering effect on the country’s producers as 2016 came to a close. Firstly, almost all of these bottled wine trades are achieved at significantly lower price points than in the domestic market. Spot checks, focusing on some of South Africa's most iconic names, suggest a discount of around 40% – and an even higher percentage if the benchmark of cellar door sales is applied. However, it is even more instructive to look at average selling prices, if only to get a sense of the margin squeeze that comes with these trades. Taking the Nielsen UK average retail price figures (₤4.78 in 2015) and adjusting this to exclude the lower-priced European bottlings, it would seem fair to suggest that the average selling price in the UK of Cape wines bottled in South Africa would be in the order of ₤8.00. The producer recovers between 20% and 25% of the on-shelf price – assume that for these slightly higher-priced wines the impact of statutory imposts is less significant – which would mean winery income of around 25% of ₤8.00, which is ₤2.00, translating into an average producer revenue of around R35.00 ($2.63) at current exchange rates. The wines that are achieving these export prices would certainly yield R50.00+ in the domestic market, making it clear

that the offshore sales come at a reduced margin. However, they also come with higher marketing costs. In the local market, producers despatch their wines to their distributors, who then pick up the bulk of the below-the-line marketing expenses. In the international markets, producers are expected to support their brands. Many of them invest time and considerable sums of money on international visits. Since each market is largely discrete, this investment is significant – one trip a year (at least) to the US, a couple to Europe, and increasingly at least one trip to China. In 2015, bottled wine exports totalled roughly 40m L less than domestic market sales. The UK, as the largest buyer, accounts for 22% of the total, followed by Germany at about 12%, the Netherlands at 10%, the US at 7% and China at around 6%. Compared with sales to the important domestic centres, none of these markets is particularly significant. By volume, the entire UK is worth roughly one third of what the city of Johannesburg consumes, while Durban (hardly considered a major local market) is bigger than the whole of the US. Since these are volume and not value figures, if account is taken of the lower export prices, the effect of the comparison would be much more dramatic. Up until now, producers have largely neglected local market promotion, focusing on growing their presence abroad, and

no doubt enjoying the tax-deductible international travel. They spend very little time drumming up support in the country’s regional capitals. Even the Greater Johannesburg area – which gets through over 100m L of Cape wine in glass, compared to a total worldwide export of 137m L – sees winemakers and proprietors only briefly, and for designated events, rather than to work the trade. Despite this neglect, volumes in the domestic market are now growing 5% faster than exports. If producers were to make more of an effort at home, visiting regional centres like Port Elizabeth, Bloemfontein and Nelspruit (each of which at present accounts for bigger volumes of bottled Cape wine than Sweden or Denmark) their finances might look much healthier. Instead, with roughly half the industry losing money, or at best breaking even, the export fantasy still holds sway. Some of the more insightful producers recognise that marketing costs have escalated, sales have slowed down, and net revenues per bottle sold earn a fraction of what can be achieved in the local market. The question being asked right now is whether enough producers will act before it’s too late, what effect this will have on the country's export efforts, and whether the local market will respond quickly enough to the new strategy to save some of the marginal producers. W

N E W S A N A LY S I S WHITE WINE SCORES

1/17 MEININGER’S WBI

THE WHITE WINE TRAP Why do red wines always score better than white wines? Is it because red wines are inherently ‘better’, or is it plain old bias? Jeff Siegel tests a theory.

The problems Critics do seem to favour red wines over white. We found that, first, reds typically score higher than whites, and do so across vintage and region. Second, red wines are over-represented above 90 points, and whites are over-represented below 90 points. In fact, reds are 20% more likely to be rated higher than 90. Finally, as an expert score crossed 90 points, the price of the wine and the variation

SOURCE: AUTHORS

Density

Comparison of sales

SOURCE: AUTHORS

o experts rate red wines more highly than white wines, regardless of price, vintage, and region? Does this mean there is a critical bias in favour of red wines? Is it a flaw in the 100-point scoring system used by the major wine magazines? Or are red wines inherently more complex than whites, which accounts for the score disparity? Or is something else going on? That was the question we wanted to answer when I teamed up with data scientist, wine lover, PhD, and former college math professor Dr Suneal Chaudhary to analyse almost 62,000 wine scores dating to the 1970s, used in reviews in the major wine magazines. This question, that red wines always seem to score higher than whites, has puzzled anyone who pays attention to scores.

in the price of the wine increased quickly. In some cases, this led to non-intuitive results, such as median reds costing more than more highly-rated whites. None of these things should happen if bias didn’t exist. In looking at the numbers, our goal was not to issue an ultimatum from on high, but to identify what seems to be a problem with the critical process. And we were well aware that there could be many reasons for the scoring disparities that had nothing to with critical bias. First, red wines may be inherently better than white wines. This seemed to be the reaction of much of the criticism of the study, and several wine writers, including Fred Swan and David Morrison, questioned why there was even a need to do it. Morrison wrote, in fact, that the study was trying to prove something that everyone already knew, what he called a common error in study methodology. Second, red wines can be more expensive to make than white wines. They require more (and more costly) oak, more ageing, and the land used to grow red grapes can be significantly more expensive, as in Bordeaux and Napa Valley. That red wines cost more money, given the perception in the wine business that cost equates quality, might have affected the findings.

Third, the review process itself may have influenced the study. Not every critic publishes every wine he or she reviews, and those that were published may have been more favourable to reds than whites. That may have skewed the findings, said Mike Veseth, professor emeritus of international political economy at the University of Puget Sound and editor of the Wine Economist website. Fourth, the scoring process, which is infamous for its inconsistencies, may have accounted for what the study found. Any study is only as good as the data it uses, and if scores are inherently flawed – and there are many reasons to believe they are – then our results come from flawed data, and the study might not have value. Still, even allowing for those caveats, something seems to be amiss. Three wine academics, including Veseth, reviewed our work before we published it, and each agreed the numbers say that what is happening is more than a coincidence. For one thing, the size of the database, those 61,809 scores, is big enough so that the results are statistically significant according to accepted standards. In addition, how is it possible, unless there is bias, that 90% of the 2010 red wines that we had scores for got 90 points or higher? Could red wines be that excellent naturally?

SOURCE: AUTHORS

In fact, talk to winemakers and oenologists, the people who deal with red and white wine quality on a daily basis, and three things emerge. First, it makes sense for red wines to consistently score higher than whites, since reds can be more complex, and complexity is seen as integral to a ‘better’ wine. Much of this is because many of the polyphenols, the chemical compounds in wine that give it its distinctive flavours and aromas, come from grape skins, and the skins are more important in red-wine production than in white, says Matt Brain, winemaker at the Fresno State winery and a lecturer in the school’s department of viticulture and oenology.

Are reds just better? “We have a different way of approaching reds than we do whites,” says Dr Stephen Menke, associate professor of oenology at the Western Colorado Research Center at Colorado State University. “Because a white wine doesn’t taste like a red, we assume it isn’t as complex, and score it accordingly. But that’s not necessarily anything to do with the wine. That’s perception, and it has to do with how we are trained to judge wine.” Menke’s other point? That the tannic bitterness in red wines that is taken as one sign of complexity is an acquired taste. Typically, he says, humans prefer sweet over bitter, which dates to when we were hunter-gatherers who had to decide if something was safe to eat by how it tasted. Sweet was safe, while bitter could be poisonous. Our appreciation of bitter, in foods like coffee, took tens of thousands of years to

acquire. Which leads to the third point. Brain says that scores may have as much to do with consensus among critics as it does with the quality of the various wines, something he describes as a compromise among peers. “If they’re rating the wine for complexity and power, then they’re going to rate reds higher than whites,” he says. “That’s the kind of wine that makes the strongest impact on the mind. There are few white wines that cause that kind of complexity. That’s what makes it such an interesting question, and you have to wonder: Is the score sometimes higher than the component parts?” Hence, this critical approach, by definition, discounts any judgment based on style. If a Sauvignon Blanc or Chardonnay is as varietally correct as it can be, with the proper balance, it will still lose points because it doesn’t fit the complex/powerful guidelines. And, in fact, that’s one reason why we wanted to do the study: Why do so many well-made whites never score more than the high 80s? One question we didn’t look at it, but that may be worth considering: Does this apparent bias affect the marketplace? We know that red wines that score more than 90 points become increasingly more expensive than similar white wines, but does it also explain why white wines tend to be less expensive overall than red wines? And does it affect what consumers buy? In regions where land prices are similarly costly for both reds and whites, like Burgundy and Napa Valley, there is a difference in price between reds and whites that can’t necessarily be explained by land prices. And in regions where whites predominate, but land prices

are still high, like Aldo Adige, whites are comparatively less expensive than reds from other parts of Italy. This dichotomy could become increasingly important in the marketplace as some whites and rosés gain market share. We didn’t include rosés in the study, but their scores also seem to fare poorly compared to reds, based on anecdotal evidence. Will winemakers, faced with difficulty in getting higher prices for whites and rosés, be forced to ignore consumer sentiment and make reds because they can charge more? Finally, this scoring conundrum could well be part of what Dr Chaudhary has identified as the chicken-egg-chick dilemma, in which the chicken and egg dilemma becomes even more complicated. Did the chicken come first? Critics rate red wine more highly because it’s more prestigious, but it’s more prestigious because critics have determined that the best wines are more complex and powerful – qualities that are only possible in red wine. Or did the egg? Producers spend more money to make red wine, using more expensive oak and grapes from the most expensive vineyards, than they do to make white wine. That’s because critics see red wine as more prestigious and producers want to do all they can to get higher scores for a more prestigious wine. That’s what the pricing analysis in the study seemed to support, where we found that red wines cost more to buy than whites with similar or even higher scores. For example, a 93 red cost more than a 94 white.And where does the chick fit in? Consumers are willing to pay higher prices for red wine because red is seen as more prestigious than white. And why do consumers see red as more prestigious? Because producers put more resources into it and critics rate it more highly – both on the assumption that red is more valued than white. Perhaps the best evidence of this chickenegg-chick dilemma comes from our analysis of scores by regions. Reds outscored white across 20 of the 21 wine regions for which we had data. The only region where whites outscored reds was in Germany, where the common perception is that the white wines – which are not powerful, and where the complexity revolves around sweetness and not tannins – are better than the reds. In other words, reds are always better than whites, except where they aren’t. W

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Comparison of price

THE BEAUTY OF AGED VINES

PHOTO: SACRED HILL

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R E G I O N A L A N A LY S I S SOUTH AFRICA

South Africa has large areas of old vines that are waiting to be found. Felicity Carter hears about the search and rescue efforts.

PHOTO: MAREE LOUW

vines in neglected blocks. Some were found in the Swartland, and “pioneers like her friend Eben Sadie made people aware they were sitting on these gems, and suddenly we were seeing old vine wines out of a region that we never knew about.” After the spectacular international success of Sadie’s Old Vine Series wines, launched in 2009, Kruger began hearing both from farmers anxious to offload their grapes, and winemakers trying to find them. She created the Old Vine Project to map out where these vines might be hiding, and recruited André Morgenthal, formerly of Wines of South Africa, and viticulturist Jaco Engelbrecht to find them. The Rupert Foundation is providing seed funding. Morgenthal says there are an estimated 2,662 ha of vines that are at least 35 years old, and sometimes over 100 years old. So far, around 7% of the total have been identified. “A lot of the grapes are already taken by an Eben Sadie or a Rupert.” Of what’s left, Morgenthal says he thinks a third of it will be “useless – not all old vines make great wines”. And, unfortunately, he thinks another third will be pulled out before the team can get to it. The problem is that they are mostly low-yielding bush vines that are difficult to prune and pick. “An old vine needs to be treated like an old person, with care and respect,” says Morgenthal. “Pruning is basically sculpting – each old vine has developed its own personality.” Old vines also dislike weeds, and when one dies, it’s hard to plant something in its place. “Old vine vineyards are like old age homes – you

Old vines produce intense fruit.

t’s a quiet, warm night in downtown Stellenbosch, and André Morgenthal pulls out some bottles and stands them on the table. They’re all old vine Cinsault, which can command up to five times the price of wines made from younger vines. Gnarled old vines are the alchemists of the wine world, whose deep roots tap the truest expressions of terroir, producing grudging quantities of intensely flavoured grapes. There are, it’s thought, many of these old vines planted in out-of-the-way places in South Africa, and Morgenthal is on a mission to find them.

The project In the 1990s, explains Morgenthal, a lawyer called Rosa Kruger got tired of practicing law in Johannesburg and moved to Stellenbosch, where she self-trained as a viticulturist. “After she travelled the world to taste and experience wine, she ended up being very excited about old vines.” When she returned to South Africa, she began cataloguing old vine vineyards. Later she worked at Johann Rupert’s prestige winery L’Ormarins, and with Rupert’s backing, Kruger continued her quest to find old

have a funeral every week or so. You have to fill the gap.” The problem, he says, is that the old vines take all the food and “bully the new vines”. And yet for all this hard work, “the farmer doesn’t get enough rand per ton, and it’s not worth it.”

Making it pay Old vineyards yield between 1.5 to 5 tons per hectare, says Morgenthal, and the grower needs to earn at least R12,000 ($917.00) to R25,000 per ton to be economically viable. But around 80% of the old vines lie within the cooperatives, some of which impose a penalty of up to 15% for selling the grapes elsewhere. “We’re trying to convince the cooperatives or the rock star winemakers to pay more to keep these farmers in business,” says Morgenthal. He says some cooperatives have now reduced the penalty to 5% or even zero, while another has decided to pay more for old vine grapes, to develop its own higherquality wine. The Old Vine Project is developing a website, to map out the vines and connect farmers and buyers. Morgenthal has also started a group with winemaker Mike Ratcliffe, called Rootstock. Every month they bring people together for wine talks. In the first month they had an old vine discussion. “One winemaker raised his hand and said, ‘How do I get hold of some?’” Seeking out old vines is tough work, and so is convincing growers not to pull them out. But Morgenthal is optimistic. “It’s like saving the rhinos – you can work as hard as you can, and you’ll save a few in the end, but not all of them.” Sometimes, it’s really satisfying work. “One farmer told us he can now put his daughter through university because he was put in touch with four winemakers.” And with that, Morgenthal carefully removes the cork from one of the bottles of Cinsault. W

Sugarcane converts sunlight into sucrose. And cynics into believers.

Used to be, engineered closures didn’t look as good as natural cork. That was the trade-off you had to make to avoid natural cork’s shortcomings. But now you can have the best of both. The Nomacorc Green Line is a new array of closures made from sugarcane. It has the look and feel you need for age-worthy wines with the performance you expect from Nomacorc: consistent oxygen transfer with no reduction and no spoilage. They’re the sweetest closures you’ve ever seen.

Closer to Nature

C O M PA N Y P R O F I L E SPIER

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THE MIXED WINE FARM Spier Wine Farm in Stellenbosch grows grapes. And raises cows and pigs and sheep. Felicity Carter goes to see the future of viticulture.

armer Angus is a flurry of quick talk and rapid movements, as if he doesn’t have enough hours in the day to get everything done. But then, he’s got a lot to do, from producing top-end wine to saving the planet. On his shed wall are blown-up photos of the industrial food system which form one large poster of animal misery. Cows standing packed in feed lots. Chickens stacked on top of each other in boxes. Pigs on their side in tiny cages, unable to move. Farmer Angus gestures at the wall and says food produced this way is more expensive than it looks. He speaks with the authority of someone who’s worked in finance, although he’s now a long way from life as a broker at Goldman Sachs in London. “There’s no interest in true cost accounting,” he says. “If it existed, then the beef from there would be multiples more expensive than grassfed beef. Because of all the health damage to a human being from eating too much Omega 6 that’s not in the cost.” Or the health damage caused to workers who breathe in faecal dust, or the “environmental damage that’s not in the price”. It’s a sunny spring day in Stellenbosch, and in between unleashing a tirade against industrial farming, taking eggs from the cartons on the bench to hand to people who wander in, and juggling a phone that never stops ringing, Angus McIntosh is a ball of energy. A nearby glass cabinet is stacked with copies of Michael Pollan’s bestseller The Omnivore’s Dilemma. “That’s the book that got me farming,” says McIntosh. In 2004 he came to Spier with his wife Mariota Enthoven, whose family own the property, and they got stuck into the restoration of the property. Pollan’s 2006 book looked at the American food chain from field to supermarket, excoriating industrial agriculture. The hero of the book, Joel Salatin – on whom Farmer Angus models himself – is a ‘polyculture’ farmer, who puts multiple crops and animals in the same space, so that each species aids

The exterior of the tasting room.

the others. Although polyculture isn’t a biodynamic method, it fits perfectly with the biodynamic belief that the farm should be a self-sustaining system – a philosophy that McIntosh has fully embraced. And part of his farming project began with ripping up vineyards.

Wine revival “Angus is a fanatic about biodynamics,” says winemaker Frans Smit. He’s sitting in the expansive tasting room, next to Evelyn Jell who’s in charge of international sales. “We started our journey to make greener-style wines eight or nine years ago. The first thing was to find an organic vineyard, where the community is involved. It took us five years to do it.” Spier has been a wine farm since 1692, with one of the oldest wine cellars in the country, dating back to 1767. Nevertheless, it wasn’t until 1971 that the first wine was bottled under the Spier name. Entrepreneur Richard Enthoven – insurance magnate and owner of Nando’s chicken chain – bought the 656 ha property in 1993 and set out to restore it. Today’s Spier Wine Farm is a destination, with a hotel, a restaurant, a convention centre, a craft market, and a farm complete

with vineyards, plus another 100 ha of vineyards in the Paarl region. But that doesn’t begin to describe what Spier is all about. It’s also a rehabilitation centre, dedicated to resuscitating the environment, improving the lives of its people and helping South Africa’s arts and food scene flourish. There’s a profitsharing olive oil business, a tree planting scheme and certifications in all directions. “We have programs we have to attend on a regular basis,” says Jell. “Water was a theme one year. We had to spend time at the water plant and walk up and down the river clearing rubbish.” Although the tasting room looks glamorous, every single table, beam and piece of chandelier is either second hand or recycled, with textiles made by local craftspeople. There are stark reasons for all this effort. South Africa has a high unemployment rate, at more than 26%. The country also faces major environmental challenges, including a recent drought that was so severe, staff at Kruger National Park considered a cull of the hippopotamuses. If South Africa can’t offers its citizens health care, literacy and employment – not to mention housing and clean water – then it faces a bleak future. That puts a huge burden of responsibility on

Building the soil Out on the farm, water is very much on McIntosh’s mind. He says the Western Cape area of South Africa is finally facing the drought conditions that have blighted agriculture in the rest of the country. “There could be 5,000 farmers losing their water,” he says. McIntosh believes the only answer is to focus on the soil. “Very few farmers are focused on building soil fertility,” he says. “For every 1% organic matter, you increase the water-holding capacity by a millimetre a hectare.” That the soil is the basis of all life was a key insight of the biodynamic movement, and whatever people think of the stranger aspects of the philosophy, on this point they have the full weight of science behind them. Generating just 3 cm of topsoil takes 1,000 years, and the UN has said that if soils continue to degrade at their current rate, the world’s topsoil will be gone in less than 60 years. The cause of that destruction is erosion, global warming, deforestation — and chemical-intensive farming. Biodynamic farmers are committed to rebuilding soil health, particularly through

Angus McIntosh, sustainable farmer

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the application of compost. Animals can play a huge role in this project, because their dung not only fertilizes, but it also spreads seeds. McIntosh gets into the back of his white four-wheel drive, which is being driven by Jell. She’s wryly humorous and able to navigate dusty corners with aplomb, even when tourists on Segways whizz out from nowhere. She steers expertly to a field near a herd of patient Limousin cattle, and McIntosh exits the car. “I also butcher my own meat,” says McIntosh in full hearing of the cows. There had been a Chardonnay vineyard nearby. When McIntosh took over management of the farm in 2004, there were 55 ha of grapes. “I sat down with Frans and for a whole season we tasted everything and then we said, ‘Listen, this is horrible crap’,” says McIntosh. The vineyards were grubbed up, until there were only 21 ha left. “The wines have got better every year,” he says. And there are multiple major awards to prove it. In the other direction is the Cabernet vineyard, and beyond that, the Shiraz. Here and there, dandelions sprout. These attract the mealybug, the insect that carries the leafroll virus in its saliva, which it injects into the vines it feasts on. “The dandelion is a home for the mealybug,” says McIntosh. “In conventional vineyards, everything is sprayed. The floor is sprayed with herbicide. The mealybug has no place to go, so what does it do? It goes straight up into the canopy, because it’s the only green thing.” PHOTO: JULIA MERRETT

businesses like Spier, who need South Africa to flourish for the sake of their own future. The wines on the table are from the Signature range, and include a Chardonnaz/ Pinot Noir rosé , a Chenin Blanc, and a spicy Shiraz, among others. There is a crystalline purity to them, the Chenin Blanc in particular. “The wines have a freshness and minerality that other wines don’t have,” says Smit. “Conventional wines have upfront flavours from the yeasts. The flavours in these wines come from the grapes. They’re low sulphur.” Smit says that if the grapes are properly balanced in the vineyard, they don’t need a lot of sulphur in the winery. “The other thing is that when you go sustainable, your yields drop dramatically for the first couple of years,” he says. The big issue is water. “The soils are getting dryer and dryer,” says Smit. Although Spier has a very low water usage – it takes around 1.3 L of water to produce a bottle of wine, from vineyard to bottling – they still need to use supplemental irrigation. The challenge for the future will be finding the right vines and rootstocks to deal with the impact of climate change. “Our climate will force our decisions,” says Smit.

McIntosh isn’t totally biodynamic. He is prepared to use antibiotics on sick cattle, and he’s happy to bring in outside nutrients, such as fish hydrolase. “I need to bring micro-nutrients in because this farm was completely” – he drops an expletive – “by the people who owned it. They farmed tobacco. Do you know how you farm tobacco? Methyl bromide.” McIntosh’s speech speeds up as he details what the chemicals did. “If I can bring in stuff from outside to improve the fertility cycle, so much the better.” McIntosh has introduced pigs, who are moved across the fields to remove the tough Eragrostis grass. After the pigs churn it up, in moves nitrogen-fixing clover. For their labours, the pigs get to eat all the non-meat food waste from the hotel and restaurant. There are also Dorper sheep, accompanied by a donkey who was appointed watchman after a predator called a caracal ate some sheep. And there are hens, living in what look like covered pioneer wagons. “Listen to the sound of their feet when they march,” says McIntosh. “Isn’t that beautiful?” Eventually there will also be ducks, to cull the snails. And to provide variation on the menu. This farm possibly represents both the past and the future of wine. In the old days, many winemakers owned mixed farms, with multiple crops. But in an age of fertilisers and high yields, growing small amounts of anything wasn’t viable, and mono-cultures – including mono-culture vineyards – became the norm. Today, as viticulturists stare down the threat of drought, climate change and pestilence, mixed farming may need to return. For McIntosh, the trick is to make the farm itself do all the work. “Of all forms of agriculture, viticulture is definitely the one you worry least about,” says McIntosh. “If you’re working more than four months a year as a viticulturist, you’re working a lot.” The tour over, McIntosh jumps out of the car and back into the shed. There are so many more projects he needs to be getting on with. W

SPECIAL REPORT RIOJA

The many faces of Rioja While wines of varietal purity have not been among the classics of Rioja, they are now a fixed feature in the portfolio of numerous bodegas.

he main variety of Rioja, Tempranillo, is the undisputed leader among the region’s varietal wines. Yet while the wines of Garnacha (Grenache), Graciano, Mazuelo (Carignan) and Maturana may be more unusual, but their quality and appeal are beyond question.

THE BOOM OF THE 1990S The classic vintages dominated the region up until the 1970s, and although Tempranillo was certainly a major player at the time, the three other main red Rioja varieties were also considered among the most successful red blends in the region. Classic Riojas with three or even four varieties in the blend were common, and a Tempranillo as the sole protagonist for producing prime vines without the use of complementary varieties was inconceivable for most winemakers. The growing popularity of Tempranillo finally changed the supply situation in the region and varietal wines – Tempranillo in particular – have influenced the activities of the upper River Ebro since the 1990s. The overwhelming international success of the most famous Spanish red variety, then as now, has certainly played a crucial role.

an astonishing development took place. It wasn’t the Garnacha Tinta (red Grenache) that attracted the most attention, but rather the Graciano and the Carignan, known as Mazuelo in Rioja. The latter posed a challenge owing to its angular and edgy character, but climate change has certainly played into the hands of winegrowers in many places, as is the case here. While rather rough and often unripe-tasting wines were initially the norm, producers have now come to grips with the variety, and a good selection of robust, structured Mazuelos with dark fruit and firm-but-accessible tannins are now available. Fortunately, the more balanced maturity of these exotic varieties among the red Riojas has also facilitated reliable maturation in the barrel. For at least 25 years, Graciano has been praised for its potential as a varietally pure wine, even though the variety as a bearer of quality in the vintages had only had a

A LOOK BACK AT TRADITION The fact that oenologists on the Ebro turned to less-prominent red varieties to produce varietally pure wines – and achieved some amazing results – is nothing new. But

minimal presence over several decades. The low-yield variety, with its tendency to mature irregularly, was only cultivated consistently by a handful of producers, and had become less prominent compared to other varieties. At times, the growing area did not even surpass 1,000 ha of vines. But as the climate warms, this robust and stable grape variety is making a comeback, and is more popular than ever, both for blending and as a standalone grape. Pioneers like Contino have shown just what Graciano can do – the wines are juicy and fresh, their colour as dark as the fruit. Garnacha has had a somewhat more difficult time. Although it was once prized for its aromatic bouquet and ability to attain a reliable degree on the Oechsle Scale, these very same properties eventually led to its downfall, as they fell out of favour. Many growing areas planted Tempranillo instead. It’s hardly surprising, therefore, that varietally pure Garnachas rarely make an appearance, apart from some praiseworthy exceptions such as the wines of Baigorri or Tobelos. But this trend could be reversed in view of the new super-premium wines from Rioja Baja that winemaker Álvaro Palacios presented just a few months ago. The 100% Garnacha Quiñón de Valmira, for example, is setting new standards in the region in terms of price and quality. One promising new grape is Maturana Tinta, a once near-extinct variety, which was approved in 2007. The quality we can expect in the future is probably best demonstrated by the elegant, spicy, dark wines from the adventurous winemaker, Rafael Vivanco.

A WHITE ROLLOUT Last year, the regional Rioja wine authorities in Logroño suddenly passed a budget to promote white wines, an action which attracted wide attention. The funds were initially intended only for the domestic market. This measure wasn’t totally unexpected, but what was surprising was the urgency of the authorities. Numerous Rioja producers have been working on the potential of their white wines for some time and the producers Tondonia and Marqués de Murrieta have shown that it is possible to produce high-quality white grapes. It is also true, however, that many bodegas saw white wines merely as a necessary addition to their portfolios, until recently. But as the market demonstrates an increasing demand for white wines – and not just the cheap, simple varieties – this has changed. It has triggered a chain reaction, encouraging winemakers to be more adventurous, and to investigate the possibility of producing a high-quality white wine with an individual and, if possible, autochthonous character. This objective can be achieved by a better understanding of the classic native grapes: Viura, (or Macabeo), which can be a onetrack grape if not handled carefully; the spicy and structured Malvasía; and the fullbodied and yellow fruity Garnacha Blanca. Producers are investing substantial effort in finding the ideal terroirs for their white wine projects, and the skilful use of oak, and some bodegas have already had some success. Examples are Nivarius, at the southern limit of the appellation, and Gómez Cruzado and Bodegas Bilbaínas in the legendary Haro Station District. They are also working with the newly rediscovered Tempranillo Blanco and Maturana Blanca grapes, which have enabled them to produce some quite complex wines, even in the first years. In 2007, winemakers were allowed to return to Chardonnay, Sauvignon Blanc and Verdejo, along with the authorised autochthonous varieties, as long as the three varieties don’t represent more than 49% of a white cuvée. This ruling was lifted recently, and the use of the three international grape varieties is no longer restricted. Winegrowers can now make single-varietal white wines using international varieties, which should give a fresh boost to white wine production on the Ebro.

PROWEIN 2017 - RIOJA MASTERCLASSES SUNDAY, March 19th

MONDAY, March 20th

10:30 am Excellent Vintages (German) Peer F. Holm will introduce you to the different wines that all have one thing in common – their extraordinary quality level.

10:30 am Barrel-Fermented White Wines (German) Rioja expert Yvonne Heistermann pre sents special white wines from the region – strong, aged in oak, and with huge potential.

12:00 pm Young White Wines (German) Rioja is more than reds. Peer F. Holm presents special whites from the region – young, modern and fresh! 2:00 pm Wine & Food Pairing (German) Rioja expert Yvonne Heistermann and Rolling Taste present the perfect match of tapas and wine. 3:30 pm Gran Reservas (English) Taste the magnificent classics from Rioja. Spanish wine expert David Schwarzwälder shows great wines with high ageing potential that have shaped the reputation of this unique region. 5:00 pm Rosados (German) In Rioja, the production of Rosados has increased. Spain expert Yvonne Heistermann will present some typical representatives of the region.

12:00 pm Reservas (German) Spain expert Jürgen Mathäß presents wines with high ageing potential that have shaped the image of the region. 2:00 pm - Young White Wines (English) Peer F. Holm presents whites that are young, modern and fresh! 3:30 pm Single-Estate Wines (English) David Schwarzwälder will guide you through single estates of varying sizes that produce wines of unique character. 5:00 pm - Wine & Food Pairing (German) Rioja expert Yvonne Heistermann presents a perfect match of tapas and wine (in conjunction with Rolling Taste). TUESDAY, March 21st 10:00 am Single Varieties (English) Rioja is more than Tempranillo! Discover other Rioja grapes with Peer F. Holm. 12:00 pm Reservas (English) Expert David Schwarzwälder presents wines with high ageing potential that have shaped the image of the region.

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PHOTO: SACRED HILL

R E G I O N A L A N A LY S I S H AW K E ' S B AY

NEW ZEALAND’S RED SECRET Hawke’s Bay, situated in the North Island, produces some of New Zealand’s most notable red wines. Yet, says Rebecca Gibb MW, it struggles for attention.

Sacred Hill, Hawke’s Bay

ew Zealand’s wine history may be much shorter than Burgundy’s, but it was producing fine red wine almost a century before the celebrated region of Central Otago produced its first Pinot Noir. There was already wine in Hawke’s Bay as early as 1851. Mission Estate Winery was established by missionaries a decade before gold was discovered in Central Otago. Te Mata Estate, Vidal Estate, and the estate now known as Esk Valley were up and running by the 1920s – half a century before the first Sauvignon Blanc was planted in Marlborough and 60 years before Central Otago released its first Pinot Noir. “We are not the new kids on the block,” says Warren Gibson, Trinity Hill’s winemaker. In 1964, before most winemakers in Hawke’s Bay were out of shorts, the late wine writer André Simon visited the region and praised a 1912 claret and a 1949 Cabernet Sauvignon. Today, veteran winemakers continue to wear shorts year-round in Hawke’s Bay’s temperate, maritime climate. Situated on New Zealand’s North Island, Hawke’s Bay is much warmer than Marlborough, 300 km to the south. The climate sits somewhere between Bordeaux and Napa, but is warmer than Coonawarra, and that’s reflected in the fruit ripeness. When it comes to size, Hawke’s Bay is the country’s second-biggest wine-producing region after Marlborough, and in international terms, covers approximately the same area as Margaret River or about a quarter of SaintÉmilion, the Médoc or Napa.

Red haven Comparisons to red winemaking regions specialising in Merlot and the Cabernets are no accident, as these varieties make up one-quarter of all the vines planted in Hawke’s Bay, making it the home of New Zealand Bordeaux blends. Merlot typically dominates blends, as the lateripening Cabernet Sauvignon can struggle to reach full maturity in cool or wet vintages. The resulting wines could be compared to Right Bank Bordeaux in warm years, offering ripe fruit with classical structure, fine-grained tannins and firm acidity. But making great Bordeaux-inspired red blends is hardly novel. Gordon Russell, senior winemaker at Esk Valley, is realistic – “No matter how good our Bordeaux blends are, there is a sea of wines like them across the world.” However, the region has another red variety that the international wine media has fallen in love with – Syrah. It offers the elegance, spice, and savoury nuances of the northern Rhône paired with sweet New World fruit. It is a unique and characterful combination. “We do have something different with Syrah and it can find a niche in the global wine market,” adds Russell. Yet the admiration of wine critics has not yet translated into sales. Australian Shiraz continues to dominate the category. Even domestically, the Shiraz/Syrah shelves are dominated by South Australian Shiraz while the local Syrahs often occupy an embarrassingly small, dusty corner.

While Hawke’s Bay is responsible for almost nine out of ten hectares of Cabernet, Merlot, and three-quarters of the Syrah grown in New Zealand, the region isn’t just a red-wine producer. More than 50% of plantings are white, and the styles range from richly textured-yetprecise Chardonnay to ripe, round Sauvignon Blanc, and voluptuous Viognier. The diversity of varieties layered on top of 25 different soil types in the region is enough to make your brain hurt. “We don’t have a key variety. Hawke’s Bay does too many things well,” says Vince Labat, head of sales, Elephant Hill – and that’s both a blessing and a curse. “It’s not as if the customer and the trade are able to put us in a box like Marlborough and Sauvignon Blanc or Central Otago and Pinot Noir.”

Image issues Currently, Hawke’s Bay does not have the renown of Marlborough or Central Otago, and its heterogeneity makes it difficult to explain in a 30-second elevator pitch. “The challenge for Hawke’s Bay in China is to become as well known as Marlborough and Central Otago,” says Fongyee Walker MW, whose company Dragon Phoenix Wine Consulting has organised a series of educational roadshows across China for the Hawke’s Bay Winegrowers Association. Yet, the lack of a star variety is not a big concern in her opinion. “In China, one of the key buying cues is region rather than grape – perhaps a knock-on from the Bordeaux effect – so it’s important for

And it also has its own event that is ripe for attracting international wine lovers. For the past 25 years, it has organised New Zealand’s equivalent of the Hospices de Beaune. While bidders from the four corners of the globe attend the Burgundy auction, attempting to secure a parcel from the latest vintage, the make-up of the Hawke’s Bay event is rather more local, and the region could seek to raise its profile beyond New Zealand shores. There has been a string of excellent vintages (2013, 2014, 2015 and 2016), and the prices that the wines have attained, while impressive in New Zealand terms, look like absolute bargains compared to the prices paid at the Burgundy charity auction. The event also provides an opportunity for outsiders to understand the region’s laid-back attitude – no shirt and tie needed here, there’s beer to drink at the auction, and winemakers present their lots in their own idiosyncratic ways. At the 2015 auction, Clearview Estate donated a personalised blending session to make a quarter barrique of wine (56 L), followed by a meal that was clearly going to involve a lot of wine. “This will be a lunch that you won’t remember,” announced the winery’s owner, Tim Turvey, at the auctioneer’s podium before the bidding climbed to NZ$7,000.00 ($5,100.00). Hawke’s Bay has history on its side, natural beauty, and a range of unique, high-quality wines. It also has a long-running auction that is ripe for internationalising. What it does not have is one variety to hang its hat on. This can make it more difficult for consumers to understand, but as Walker pointed out, that’s no issue for some markets, including China. Of course, spreading the word – whether it’s masterclasses in China, Australia or the UK – costs money, and with most wineries producing less than 200,000 L annually, advertising and promotional budgets don’t stretch to multiple market campaigns. There is collaboration within the region, but the international success of the region’s wine brands currently rests on the success of individual wineries. They might be Hawke’s Bay wineries, but the Hawke’s Bay name is not sufficiently renowned to sell their wine alone. It is brand first, New Zealand second, Hawke’s Bay third. W

Craggy Range Established in the early 1990s by Americanborn entrepreneur Terry Peabody and Steve Smith MW, the brand’s upmarket headquarters sits underneath Te Mata Peak. While it also has vineyards in Martinborough and Marlborough, its ‘prestige’ wines Le Sol Syrah and Sophia (a Bordeaux blend) are the essence of Gimblett Gravels. Its flagship Chardonnay Le Beaux Cailloux ceased production after the 2011 vintage due to leafroll virus, which is a major challenge for this stony sub-region of Hawke’s Bay. Elephant Hill Founded in 2003 by a German couple who fell in love with the coastal village of Te Awanga. Sitting on the shore of the Pacific, plantings of later-ripening varieties have been pulled up and this winery now excels at savoury, spicy Syrah, restrained Sauvignon Blanc, and saline Chardonnay. Sacred Hill A sheep-farming family got rid of their woolly friends in favour of vines in the 1980s, with more success than they had anticipated. Its entry-level range with a distinctive orange label includes three varietal wines from Marlborough, but its ‘Special Selection’ hails from its Hawke’s Bay heartland. The Riflemans Chardonnay, Deerstalkers Syrah and Helmsman Cabernet Sauvignon blend are aimed at the fine wine market. Te Mata Estate One of the region’s oldest wineries sits in the Havelock Hills and is home to Coleraine, New Zealand’s closest thing to a Bordeauxclassed growth. It has two other sites across the region, including the Bridge Pa Triangle, which is home to its flagship Syrah, Bullnose. Trinity Hill Founded by cricket-mad Kiwi John Hancock and the London-based Kiwi owners of Bleeding Heart restaurant, Trinity Hill has become even more international since Charles Banks, the US-based former owner of Screaming Eagle, took a stake in the winery. Its flagship Syrah, Homage – produced just nine times since Trinity Hill was formed in 1993 – is often called New Zealand’s best Syrah.

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Hawke’s Bay to establish itself as a high-quality production area regardless of the varieties.” With some of the country’s finest wines on its books – Te Mata Coleraine, Vidal Legacy Chardonnay, Trinity Hill Homage Syrah – there’s little doubt that Hawke’s Bay can produce outstanding-quality reds and whites. From the coast to former river beds like the Gimblett Gravels, and climbing up to the Crownthorpe Terraces, the general standard of wine production across its 76 wineries is good to excellent. Yet it’s not the first region that comes to mind when buying New Zealand. Gaëtan Turner, president of South World Wines, is based in Paris and sells Elephant Hill’s wines across France, which sounds like a task akin to selling ice to Eskimos, except that you’ll now find Hawke’s Bay wines in Michelin restaurants from Paris to Monaco. His customers – if they know anything about New Zealand wine – have heard of Marlborough, but not Hawke’s Bay. “But there’s a different story to tell, and then we show them the photos of Elephant Hill and it blows them away.” Elephant Hill is a wine-photographer’s dream location – the untamed Pacific waters ebb and flow within metres of its vineyards. The rugged peninsula of Cape Kidnappers, which juts out into the ocean, provides a dramatic backdrop. Drive 15 minutes inland to the artsy town of Havelock North and there is more natural beauty. Follow Craggy Range’s winemaker Matt Stafford on Instagram and his images of morning runs up Te Mata Peak or along the local beaches (sometimes meeting a seal along the way) attest to the spectacular landscape of this region. What’s more, its main city, Napier, was destroyed by an earthquake in 1931 and was rebuilt in Art Deco style, making it a mecca for architecture lovers.

NOTABLE HAWKE’S BAY WINERIES

SPECIAL REPORT ACCOLADE WINES

Aspiring Higher

How Hardys Wines is delivering premium wine sales When Thomas Hardy planted his first vines in 1854, he vowed to “create wines that will be prized in the markets of the world”. Not only did he fulfil that promise, but Hardys wines are now exciting a new generation of wine lovers.

hen Thomas Hardy arrived in South Australia in 1850 with only a few pounds in his pocket, he was ready for anything. In his early 20s, Hardy had left a comfortable life in Devon in England behind, to seek opportunities in the New World. He soon found work with John Reynell in the McLaren Vale, tending to cattle,

working the farm and learning about wine. After a stint working on the goldfields of Victoria, he returned to South Australia in 1853 to build Bankside, his home – and to plant grapes. His vision was to “create wines that would be prized in the markets of the world”, and he produced his first vintage in 1857. After combining wines from different regions – a practice that

ASPIRE HIGHER –

CONNECTING WITH TRADE AND CONSUMERS The future health of the wine industry depends on encouraging consumers to choose better quality, more premium wines. To that end, Hardys has developed an innovative, highly impactful branding campaign, called ‘Aspire Higher’. By inviting consumers to Aspire Higher with Hardys, they are encouraged to take that extra step, explore our range and unearth the innovation of a 160year legacy that’s received over 9,000 awards to date. No matter what, there is always a Hardys wine that consumers can rely on.

Tintara Winery, purchased in 1873

Alix and Bill Hardy represent the fifth and sixth generations

became a venerated Australian tradition – Hardy became known as an expert blender and his wines were exported back to England. Fittingly, Thomas Hardy is revered as the ‘Father of the South Australian Wine Industry’, because he was not only instrumental in transforming the fledgling wine industry into a serious business, he also helped lay the foundations for its international success.

Today, the Hardy family remain intimately connected with the Hardy brand. Fifth-generation Bill Hardy, for whom the William Hardy range is named, remains a globe-trotting ambassador, despite being officially retired. Bill’s daughter Alix has recently joined the company, ensuring that there is now a sixth-generation Hardy in the business. Already, preparations are underway for the 165th anniversary, which falls in 2018. There will be a lot to celebrate: Hardys is the Number 1 value wine brand in the UK, and number 4 in Australia. It was named Australia’s Most Powerful Wine Brand in 2013 and the Hardys range continues to showcase the best of Australia in 133 countries around the globe.

PUTTING CUSTOMERS FIRST Testament to this are the contemporary ranges introduced in recent years such as Brave New World, a new twist on blending, and Hardys Geology, which showcases the terroir of the McLaren Vale, which boasts some of the most geologically diverse soils in the world. It’s also where the home of Hardys, Tintara is situated. Purchased in 1873, Hardys Tintara has recently been upgraded into a world class wine production facility and tourist centre housing many of the company’s finest museum pieces. Among them is a replica bottle of the oldest existing wine in Australia (the original is under lock and key, and its whereabouts is known only to a select few). Hardys has survived and thrived for so long because the company has always listened to its customers and offered a range of high quality wines at every price

To celebrate the 80th birthday of Hardys’ matriarch Eileen Hardy in 1973, her children created the Eileen Hardy Shiraz. In 1987, the Eileen Hardy Chardonnay was launched. Both wines are highly awarded, and acknowledged as Australian classics. So important are they, that a special event was held at the Tintara Winery to celebrate the 30th birthday of the Eileen Hardy Chardonnay.

point, from everyday drinking to wine for the most special occasion. As the current custodian of the Hardys wine legacy, winemaker Paul Lapsley, puts it: “Today, defining and refining the style of each of the Hardys ranges is paramount as we continue to tirelessly search out parcels of fruit that will build and strengthen Thomas Hardy’s legacy.” COME AND INTRODUCE YOURSELF AT PROWEIN Visit Accolade’s stand at ProWein 2017 and we’ll be delighted to pour you wines from the Hardy range, so you can taste the quality for yourself with Chief Winemaker Paul Lapsley. Hall 9 /J06 www.accolade-wines.com

SPECIAL REPORT LES DAUPHINS

Les Dauphins expands The hit Rhône brand Les Dauphins is launching an organic range – plus breakthrough sparkling wines.

PHOTO: LES DAUPHINS – BARTHÉLÉMY

Les Dauphins at Top Wine China, held in Beijing in June 2016.

“We work side by side with our wine growers to ensure the quality of the grapes, so they express the fullness of flavour, to maximize taste pleasure.” Guillaume Valli, Les Dauphins Oenologist

he Les Dauphins brand, launched in 2010, quickly became one of the bestselling wines ever to enter the UK market. With its striking retro label and high quality wine, Les Dauphins was an instant hit. Les Dauphins is now an international brand, being sold in 25 different markets; in Germany, Les Dauphins is being distributed through major company Wein Wolf. Last year, it was finally China’s turn, after the national distributor Beijing Easy Cellar – which works with some of the most prestigious brands in the world – added Les Dauphins to their portfolio. Its arrival in China is being heralded with special dinners and events. To fulfil the hot demand, Les Dauphins

has created certified organic wines that celebrate the best fruit of the Rhône. Guillaume Valli, the oenologist behind the brand, has also created two fine sparkling wines – a rarity for the Rhône region. Les Dauphins is produced by Cellier des Dauphins Winemakers, the number one bestselling AOC Côtes du Rhône producer. Celliers des Dauphins was awarded Rhône Winery of the Year two years in a row by the New York International Wine Competition.

PHOTO: INTERHONE

A NEW, AWARD-WINNING AND CERTIFIED ORGANIC RANGE

TERROIR Our organic know-how is easy to explain: we come back to our grand father’s practise of putting nature at the heart of our process, and adapting to the weather, the biorhythm and other environmental influences. Taking care of the soil is essential to our organic approach.

Côtes du Rhône Organic Rosé A beautiful light pink in colour, offering delicate scents of summer fruits and a refreshing palate.

Côtes du Rhône Organic Blanc An attractive straw colour offering aromas of passionfruit and peaches. A zesty palate with a long finish.

Côtes du Rhône Organic Rouge Ripe, berry fruit on the nose and palate, while being elegant and soft.

Côtes du Rhône Villages Massif d’Uchaux Organic Red A complex and aromatic wine. Full bodied and rich, it offers rounded tannins and a long finish.

COME AND TRY THE WINES OF CELLIER DES DAUPHINS

Les Dauphins Blanc de Blancs Light, refreshing and delicate but with a kick of French attitude.

Les Dauphins Cuvée Rosé Delicate pink in colour, with good acidity and a long finish.

Visit us at ProWein 2017 and be introduced you to our internationally renowned Les Dauphin range. HALL 11/C109

TECHNOLOGY VINVENTIONS

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A REVOLUTION IN CLOSURES Vinventions doesn’t just offer different types of closures – it wants to revolutionise the category. Felicity Carter paid a visit.

Dr Freudenberg sits at a table, a display box in front of him. In it are screwcaps, corks, glass and synthetic closures. This is revolution number one: a single company offering a complete range of closures. “The starting point was that our customers said to us, we are tired of having a supplier come to me and say ‘natural cork is best’, and then someone else comes along and said ‘screwcap’,” Dr Freudenberg explains. They want to be able to sit down and find the right closure for each different type of wine. He picks up a screwcap. This, he says, holding up a crimson capsule, is perfect for the modern, entry-level wine. Next, he picks up a cork. “For the very premium high-end, you take a natural cork,” he says, and looks at it appreciatively. “For me personally, it’s one of the most beautiful products.” The topof-the-range cork, the Ohlinger Selektion Flor, isn’t cheap at €0.85 ($0.90) a piece, but it has been individually tested by a sharp and reliable human nose and is guaranteed to be problem free.

Then Dr Freudenberg moves to the glass closures, and chooses one with a faceted head. The seal, he says, has so improved that it can easily compete with other forms of closure. More importantly, glass can be shaped in many different ways, to bring a premium, elegant touch. “You can put something almost like a diamond on the bottle,” he says. “With Vinolok, the gliding and the oxygen performance are much better,” he adds, picking up a black glass stopper. “In the old days, it was the beauty that attracted people, but these days it’s the sealing performance.” He puts the stopper down. “It costs about €0.40 per seal, although depending on how much polishing you do, you can easily spend a euro. But the fun part is the bottle you create is so beautiful that the end users will pay much more. That’s part of the game – you invest €1.00 into packaging and you get €4.00 to €5.00 back in retail.” Then come the synthetics. He picks one up that looks virtually indistinguishable from a cork: a Nomacorc. It has nothing, he says, to do with the old Normacorcs that were made of extruded petroleum-derived foam. “The aesthetics have been fundamentally reworked, and most importantly, they have a negative carbon footprint, because they’re plant-based.” Now they’re made from sugar cane. “In the old days, people said synthetic cork was good for three to five years. Now we give a guarantee of 25 years for the Reserva range.” Nomacorc was founded in 1993 by Belgian Gert Noël who, frustrated by high levels of cork taint, sought an alternative. Two hundred and forty prototypes later, he and son Marc launched the first commercial closures using foam extrusion technology. By 2003, the

From the Nomacorc Green Line

SÜBR is a biodegradable agglomeration cork

he facility in the tiny town of Fussgönheim in the southwest of Germany is modest. It’s nothing more than a corridor of offices over a small industrial facility, where wine closures are graded, sorted, tested and printed. But it’s from here – and at six other facilities, located in Belgium, France, Argentina, South Africa, China and the US – that Vinventions CEO Dr Heino Freudenberg plans to revolutionise the wine world. Or at least the way it seals its bottles.

The many variants

Dr Heino Freudenberg, CEO, Vinventions

company had opened facilities in Belgium, followed by China (2007) and Argentina (2013), and invested heavily in research and partnered with five top institutes and universities, to study the role of oxygen in wine. By 2015, Nomacorc was responsible for 13% of closures worldwide, having nabbed market share not only from synthetic closures and screwcaps, but also from cork itself. The rapid expansion had to be financed, and in 2007, private equity firm Summit Partners had acquired a majority stake in the company. Eight years later, however, Noël found a new equity partner, Bespoke Capital Partners, who acquired a majority stake in the company, and founded Vinventions. “We invested in Nomacorc as a platform for consolidation of the highly fragmented supply chain in the $250bn global wine industry,” Mark Harms, co-managing partner of Bespoke, said in a press release issued at the time.

A new giant Vinventions, the parent company of Nomacorc, is a wholly new enterprise, formed by shareholders including Dr Freudenberg. Their goal is to offer a complete range of closures, so the company went on an acquisition drive. In June 2015 they acquired the Ohlinger Group. Based in Fussgönheim, the company specialises in cork. Later that year came a deal with Preciosa for the global distribution of Vinolok/Vinoseal. Vinventions then started Syntek Bouchage in 2016 and

1/17 MEININGER’S WBI PHOTO: EVA52 - FOTOLIA.COM

launched Vintop, its own brand of screwcaps in 2017. “It’s not so hard to make acquisitions – the hard thing is to bring it to life and make people feel like one family,” Dr Freudenberg says. “Like in politics, it’s easy to win a war but hard to win the peace.” So, the shareholders have a 10-year agreement. “This is a long-term journey.” The next step is to bring Nomacorc’s innovative thinking to the entire category. Noting that there is still plenty of room for innovation in both the cork and screwcap categories, Dr Freudenberg produces his smartphone and shows pictures of a cork tree. He says the cork is harvested three times from the one tree. “It’s like when men shave,” he says. “The first couple of shaves look like rubbish, and then you get a nice beard.” While “natural corks are very beautiful products, single-piece natural corks remain inconsistent in their performance, he admits, adding there is still work to do to eliminate TCA entirely. What’s even more important, in his view, is ridding cork of other off flavours. “These are even more dangerous for wineries,” he says. “If you have a strongly TCA wine, then it’s obviously the cork, but if there’s an off flavour or a little bit of sweat, then it’s the wine that gets blamed.” The third thing that needs to be done is to make the oxygen ingress more consistent. The company has already launched one innovation: SÜBR, a joint venture between Vinventions and Cork Supply. It’s an agglomerated cork made without glue. “With the SÜBR, we have developed something that is biodegradable,” he says. “The majority is cork and the rest is a biodegradable material.” Overall, the company believes that the natural cork segment can grow by another billion closures. A new screwcap liner free of PVC/PVDC is also being launched this year. “The screwcap is incredible in its convenience,” says Dr Freudenberg. “But at the same time it is very boring, because they all look the same and everybody is working with the same technology, the same foil and everything.” He says it’s difficult to make money in screwcaps, because making them for the wine industry is problematic for manufacturers. “With spirits, you have a million units, even with an unsuccessful spirit,” he says. “But in wine, it’s only 5,000 units. With their heart, the winery would like to have a slightly different screwcap,

Cork tree

but the industry isn’t capable of delivering it.” That’s something else he plans to change – along with finding a material other than aluminium. “Aluminium is nice because it’s easy to process, but it has a terrible carbon footprint and it’s vulnerable.” Not only that, but if screwcaps are dented, the wine can become oxidised. He says most people probably don’t realise that, because the drinking cycle of many screwcapped wines is so short, the problem isn’t obvious. “If you put a screwcap on a Grosses Gewächs wine, you want it to rest for three or five years. But if you dent it, it’s done.” What could replace aluminium? Dr Freudenberg looks like he’s struggling not to say. He’s clearly excited by the prospect and wants to talk about it, but he’s mindful of not giving away trade secrets. “Materials unknown in this environment,” he finally says. “Sometimes they are very old materials.”

Other innovations Dr Freudenberg says that Vinventions, like Nomacorc before it, is likely to partner with other institutions. “Universities are great for the early stages of innovation,” he says, adding how much he enjoys the conversations he has at Geisenheim University in Germany, because they’re willing to consider things that are “very far out”. He adds that university input is also valuable at the end of the innovation journey, to give external validation. “They make sure we have rattled and shaken everything.” In the middle phases, however, it’s better for a company to have exclusivity over research and work with technology partners, to protect the intellectual property. What’s important, he says, is “open teamwork – that not only applies to internal

cooperation across our plants, but also with our customers, suppliers and partners. The charming thing about Vinventions is that pretty much everybody who is really good can come to us and say, ‘can we play together?’” Sometimes these partnerships can be a better option than acquiring a new company. Dr Freudenberg leads the way downstairs to the warehouse, where corks are being sorted. Along one wall is a set of what look like bellows. “Microwave technology,” explains Dr Freudenberg. The old Ohlinger company once trialled it as a way to remove TCA from corks. It wasn’t a bad idea, says Dr Freudenberg, but it wasn’t perfect. You have to try things, after all. The floor of the warehouse is covered in bins that are filled with corks. Blank corks, printed corks, high-quality corks. In the next room are stacks of foil and the machine that adds the foil to screwcaps. And there, in the corner, is the cork-testing office. There are two testers and a table heaped with small plastic containers containing three or four corks apiece. In what must be one of the weirder jobs of the world, it’s the testers’ duty to open each container and take a deep sniff, searching for TCA and other off odours. “Humans can do this for 20 to 30 minutes,” explains Dr Freudenberg. “Then they do something else for half an hour and they are refreshed and can start again.” It’s a huge amount of effort to go through to ensure each little plug of cork bark meets the standards. But Dr Freudenberg loves it. “We consider ourselves the bodyguard of wine,” he says. “But you don’t want to see the bodyguard. The client stands on stage and we’re sitting in the last row, making sure they have a great performance.” W

SPECIAL REPORT BULGARIA

Bulgarian wines in the ascendancy Producers from south-eastern Europe are attracting attention with their characterful wines – and are winning ever more medals

t ProWein 2016, the performance by Bulgaria was perhaps the most pleasant surprise for many experts: this traditional but still too little known wine country in the south-east of Europe attracted attention with its professional presentation, excellent wines, three fully booked master classes with top sommelier Markus Berlinghof and a “Bulgaria Night” at its stand in Hall 15, which created a great deal of goodwill. Having impressed experts from all over the world last year with the quality of their wines, at ProWein 2017 the Bulgarians want to go a step further in terms of image promotion. Once again, there will be three master classes with Markus Berlinghof, a “Welcome to Bulgaria!” on the first day of the fair from

4:30 pm at the stand – and plenty of time to discover exciting wines from international and indigenous grape varieties. “Wow - that’s Bulgaria?!” Charlie Pillitteri, himself CEO of a large Canadian wine company and a distributor operating worldwide, exclaimed at ProWein 2016, totally perplexed by the quality of the red wines he tasted at the stand – subsequently purchasing a large quantity of one of them for the booming Chinese market. Markus Berlinghof, who had not previously had very much to do with Bulgarian wine, also admits that he underestimated the country in the south-east of Europe: “I was really surprised by the structure and strength of many Bulgarian wines.” The top sommelier from Hamburg has since increased his

knowledge by travelling to Bulgaria and will be able to talk first-hand at ProWein 2017 about his experiences. At the “Concours Mondial de Bruxelles”, one of the world’s leading wine competitions, the Bulgarians gave the 320 tasters from every continent plenty of aha-experiences at their “home game” in Plovdiv in 2016. 42 percent of the wines submitted from Bulgaria won a medal – including, on four occasions, “Grand Gold” for exceptionally high quality at an international level. Such a thing would have been unthinkable just a few years ago. But the huge revolution in quality in the Balkans is now bearing fruit. Bulgarian wine is shedding its negative image from 40 years of socialism and returning to its former level. In addition,

PHOTO: BORISLAV CHEPISHEV

the US Wine Enthusiast recently rated the Thracian lowlands, with their capital Plovdiv, as one of its top 10 wine destinations for 2017. No wonder: after all, the god of wine Dionysos came from ancient Thrace… In recent years, the full-bodied wines from there and from the Danube, the Struma Valley and the Black Sea have increasingly (and with good reason) been found in qualified specialist retailers and some Michelin-starred restaurants in Europe and overseas. They are produced from the indigenous vines of Bulgaria, such as Pamid, Misket, Dimyat, Gamza, Mavrud, Rubin and Shiroka Melnishka Loza or from internationally renowned varieties, such as Cabernet Sauvignon, Merlot, Syrah, Chardonnay and Sauvignon Blanc. Bulgaria is a very mountainous country. However, almost everywhere between the Black Sea in the east and the Macedonian border in the west, microclimates and soils ranging from chalky loess and brown and black earth to weathered clay soils, combined with lots of sunshine, provide ideal conditions for wine growing. Homer described the ancient Thracians as brave fighters who “carry mighty weapons, ride horses as fast as rushing winds and make good wines that they drink out of beautiful goblets.” Many different archaeological finds confirm the highly developed wine culture of the Thracians. And wine cultivation probably dates back to that time. The Roman colonisers exported wine from Thrace to Egypt. When the Slavs and Bulgars settled in the Balkans in the sixth and seventh centuries, they discovered a flourishing wine culture that reached its peak with the introduction of Christianity in 864 and the subsequent expansion of the monasteries in the Middle Ages. Even 500 years of Ottoman occupation could not wipe it out. After the country was liberated from Turkish rule in 1878, the wine industry quickly regained its former importance and by the end of the 19th century, almost 100,000 hectares of land were being used to grow vines. The Phylloxera aphid then achieved what the Ottomans had not managed to do… by the end of the First World War, less than half of the area under vines remained. During the Communist era after 1945, huge wine factories were created with the task of providing cheap wine for the Soviet Union and other Warsaw Pact countries. Thanks

Bulgaria has a rich and ancient heritage.

to large amounts of new planting, mainly with Cabernet Sauvignon, Merlot, Muscat Ottonel, Chardonnay, Sauvignon Blanc and Traminer, the amount of land in Bulgaria devoted to wine-growing peaked at just under 200,000 hectares in the 1970s. The fall of the Iron Curtain meant a complete reorientation for viticulture. All state-owned enterprises were privatised in the years after 1991, new wine cellars were built and large investments were made in the vineyards. The National Vine and Wine Chamber, established in 2000, together with its six “subsidiaries” in Sliven, Sandanski, Plovdiv, Pleven, Burgas

and Varna, has set new standards for wine making and helps its 75 member firms to market their produce. Its marketing activities include the Vinaria international trade fair in Plovdiv, the Salon de Vin in Sofia, a range of other national events and, since 2013, a promotional programme outside Bulgaria under the title “Bulgarian Wine Treasures” and “Enjoy the New Old World Wines.” Around 60,000 hectares are now under vines in Bulgaria. They are spread over the five regions of the Danube Plain in the north, Rosental/Podbalkanski Raion in the centre, Struma Valley (south-

SPECIAL REPORT BULGARIA

west), the Black Sea (east) and Thrace (south) and these are further subdivided into 54 growing areas. Of the 2m hL of wine produced annually, 80% to 90% is exported to more than 70 countries. The most important export markets are now Poland, the UK and Sweden, but intensive promotional programmes are currently also under way in the USA, China and Russia. The Bulgarian wine industry now has a modern look thanks to the enormous investment in vineyards, cellars and machines, and is building its international reputation year on year. When Bulgaria joined the EU in 2007, the existing Wine Act of 2000 was fundamentally revised. Since then, the country has had strict guidelines for the production of quality wines. Around 250 vineyards and wineries are making great efforts to gain respect for their country’s wines abroad – and they are being increasingly successful. All ten companies exhibiting at the National Vine and Wine Chamber’s stand at ProWein represent the new image of Bulgaria as a wine country, although they vary greatly in size and focus. As was the case last year, the companies represented are: Domaine Boyar, Angel’s Estate, Saedinenie Winery, Logodaj Winery, Villa Yambol, Minkov Brothers, Domain Menada, Vinal AD, Vinzavod Asenovgrad, and Vinex Slavyantsi.

THE WINERIES PRESENT AT PROWEIN 2017 ARE: Domaine Boyar - one of the biggest and most modern Bulgarian wine producers,

Dimitar Panov, Bulgarian oenologist

successfully combines microvinification methods with the most state-of-the-art technologies and winemaking practices. The company is also established as one of the leading and most trusted exporters of quality Bulgarian wines. They have a long list of prestigious awards from biggest international competitions. Among the most awarded wine brands of the company are: Domaine Boyar Reserve, Quantum, Elements, Domaine Boyar Platinum, Boutique Collection, Korten and Solitaire. Domaine Boyar is the only Bulgarian wine brand has ever entered the AC Nielsen Top 50. The winemakers at Domaine Boyar are among the most prominent professionals in the Bulgarian wine industry, famous for creating some of the most significant Bulgarian wines: Kapka Georgieva, Dimitar Panov, Rosen Georgiev and Dojchin Andreev, among others. Angel’s Estate, set in the hills of Sredna Gora, planted its first vines in 2007 and, right from the start, aimed for the top segment in which Bulgaria was still somewhat underrepresented.This ultramodern winery now has 106 ha of vines, of which 70% are red, along with a fully temperature-controlled fermentation plant and 1,820 oak barrels. The winery relies totally on international vine varieties, has a planting density of 5,000 plants per hectare, and its different blends under the Stallion brand have recently collected medals on a grand scale at many international competitions.

Pruning in the vineyards.

that tradition and progress can very well go hand in hand. The company mainly focuses on indigenous grape varieties and on Broad Leave and Early Melnik, which are typical of the Struma Valley, but, under the direction of Italian star oenologist Riccardo Cotarella, produces complex red wines that are nothing like the “tannin bombs” the area was once known for. The vines of Villa Yambol, one of the most important wine producers located in the south of Bulgaria, date right back to 1924. Chardonnay, Muscat, Cabernet Sauvignon, Merlot and Mavrud ripen perfectly in the mild climate along the Tundja river before they are made into wines for keeping, some in oak barrels, in the two wineries in Yambol and Straldja. One special feature of Yambol is that it even has its own barrel cooperage!

The Saedinenie Winery is situated in the Thracian Valley and was completely modernized in 2012. On its 700 ha, the winery produces modern wines to suit international tastes, using Cabernet Sauvignon, Merlot and Sauvignon Blanc, as well as unusual varieties for Bulgaria such as Dornfelder, Glera and Regent. Bulgaria’s foremost expert oenologist Vladimir Vlachkov is devoted to perfecting the closed vinifiction process for brands such as F2F, Pixels and Verano Azur, demonstratingthat the Bulgarian wine industry has long since moved into the 21st century.

The winery with the longest tradition among the eleven present at ProWein 2016 is that of the Minkov Brothers. In 1875, the three brothers Ivan, Vasil and Nikifor put Karnobat in Bulgaria on the world map of wines and, by taking a gold medal at the 1894 Concours International de Bruxelles, demonstrated for the first time the winemaking potential of this country in southeastern Europe. More than 100 years later, the Minkovs are once again back winning medal after medal in the big international competitions with their brands such as Oak Tree, Jamais Vu, Le Photographe and Cycle – the only difference being that their current wines are produced using the latest technology and an experienced team of oenologists.

And, talking of newcomers, the Logodaj Winery in the warm Struma Valley in the south-west of the country has demonstrated in the 20 years of its existence

Domain Menada, which was established in 1901 as the Loza cooperative near Stara Zagora, currently has 426 hectares of vineyards. Menada, which was acquired

MAVRUD WITH MARKUS BERLINGHOF PHOTO: WWW.MALZKORNFOTO.DE

He was named Germany’s Best Sommelier in 2013 and Gault Millau’s Sommelier of the Year in 2014. He currently coaches the German national team of sommeliers and works as international consultant. At ProWein 2017, Markus Berlinghof will introduce interested parties to Bulgaria’s best wines, from Mavrud to Misket, from Cabernet to Shiroka Melnishka Loza. Under the title “Hidden gems from the Balkans”, there will be a total of three Master Classes on the Bulgarian stand in Hall 15 J21: The event “Welcome to Bulgaria!” on Sunday 19 March, with finger food at the stand 15 J21 from 16.30 on, will give you a further opportunity to get to know the wines and their producers. Registration is essential. To register, please email: valentina.phillips@xenos-comm.de

in 2002 by the French Belvedere Group, renamed Marie Brizard Wine & Spirits in July 2015, also has the latest technology and a capacity of 20 million bottles per year, thanks to the international investment. The house specialities are single variety Cabernet Sauvignon and Merlot wines, as well as blends using local grape varieties such as Mavrud and Rubin, the latter being a Bulgarian

Masterclasses with Markus Berlinghof Sunday 19 March, 11.30 am “Mavrud and Co.: Red wines from indigenous varieties” Monday 20 March, 10.30 am “Undiscovered white and rosé gems from Bulgaria” Monday 20 March, 3.30 pm “Cabernet, Merlot and top international blends”

hybrid of Nebbiolo and Syrah. Their famous brand TCHERGA is one of the best known and prestigious Bulgarian brands on the local market and abroad. TCHERGA means ‘traditional carpet’ and the concept behind the product is a colorful and tasteful wine with character. Every year their oenologues select the wines with the best features and make a blend which is unique to the year.

Vinal AD was established in 1947 and is located in the north of the country in the Danube Plain. The winery has a huge range of more than 600 individual assortments, from dry to sweet wines, still and sparkling, produced from both international and national grape varieties, as well as fruit liqueurs, vermouth, vodka, gin and brandy. Annual wine production exceeds 8.5 m litres. Over 90% the winery’s production is export-oriented with main destinations including Russia, the UK, Germany, China, West African countries, Vietnam, Poland, the Czech Republic, the Baltic countries, Central Asia, South Korea and the US. The core distributor and exporter of Vinal AD’s production is Bulgarian Wine Company Ltd. The vines of Vinzavod Asenovgrad, located in the south of Thrace not far from Plovdiv, also date back to 1947. The main speciality of Asenovgrad is the Mavrud grape variety with its thick-skinned fruit that produces a very typical red wine for keeping, with a deep colour and good phenol structure. Vinzavod Asenovgrad can process up to 13 million kilos of grapes and its entire production capacity is 15 million bottles of quality wine. This operation has also increased its sales in Western Europe over the past few years. Perhaps the most unusual concept of all ten producers on the stand of Bulgaria’s National Wine and Vine Chamber at ProWein is that of Vinex Slavyantsi. 40 per cent of the staff of the winery, which is located in the south-east of the country not far from the Black Sea, are members of the Roma minority. Since 2008, together with Swedish partners, the company has promoted the education of Roma children in the villages of Sungurlare, Slavyantsi and Chubra, the locations of its wineries, and, since 2014, Vinex Slavyantsi is the first vineyard in Bulgaria to hold a Fairtrade certificate. So consumers who buy the products of this winery should not just have a good wine in their glasses, but also a good feeling. COME AND TASTE THE GLORIES OF BULGARIAN WINE FOR YOURSELF. Hall 15 J21, ProWein, Düsseldorf 19th to 21st March, 2017

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CHABLIS STEELS ITSELF

PHOTO: SACRED HILL

R E G I O N A L A N A LY S I S CHABLIS

Last year, Chablis was hit by hail, frost and mildew. This will probably push up prices, but, reports Adam Lechmere, it’s about time.

The old Simonnet-Febvre Winery in Chablis

s spring 2016 moved into summer, Michel Laroche took a map of Chablis and drew circles around the areas that had been affected by frost or hail. He made three huge blobs and half a dozen smaller ones, colour coded to represent three events – the severe frost of 27 April and the two bouts of devastating hail on 13 and 27 May. He might as well have circled the entire appellation. Scarcely a vine – apart from the 100 ha of Grand Cru vineyard to the north of the town of Chablis – escaped. Then, after the frost and hail, came widespread mildew. Vignerons joke that the only thing they didn’t get in 2016 was a plague of locusts. The little commune of Béru in the east of the appellation lost 100% of its crop. The premier cru Fourchaume in the north escaped the hail and frost, but lost 50% to rot. Elsewhere, yields were down by 50% to 60%. “I’ve seen hail before and I’ve seen frost, but I’ve seen nothing like that in 50 years of winemaking,” Laroche told Meininger’s..

Poor soils, fine wines Of course, Chablis is used to extreme weather. The northernmost appellation of Burgundy – along with Champagne and

Alsace it’s one of the three most-northerly wine regions of France – is geographically in the middle of the country, several hundred kilometres from the coast in any direction. It’s Burgundy, but it is 130 km from Beaune, with the Morvan massif between. The climate is semi-continental, and with no maritime influence, winters can be brutal and spring frosts hugely damaging. The pretty town of Chablis, which bestrides the Serein river, is the hub of 5,300 ha of vineyard which carpets the rolling hills to the north-east and the south-west. The finest – the seven ‘climats’ that make up the Grand Cru appellation – look south-east over the river and the town. These Grand Crus – Les Preuses, Bougros, Vaudésir, Valmur, Grenouilles, Les Clos and Blanchot – benefit from two important topographical features. They are close to the river and so take reflected heat from the sun, and they are protected from cool northern winds by the cap of forest, the Bois du Taillis, on top of the hills behind. The Grand Cru vineyard is exclusively on the right bank of the Serein, while the 770 ha of Premier Cru, including renowned names like Vaillons, Montmains, Vosgros and Les Beauregards, surround the town on both sides of the river. In

the best years, Premier Cru Chablis can be as rich and age-worthy as Grand Cru. The next level down is the 3,500 ha of basic Chablis, and finally, 950 ha of Petit Chablis, whose vineyards are in the northern part of the appellation, mainly on the tops of slopes. The latter is often described as ‘the lowliest’ of the four quality levels, and while it can be insipid, there are some very fine examples on the market. “People make the mistake of thinking Petit Chablis means low quality, but that’s not the case,” educator and former winemaker Eric Szablowski says. The quintessential Chablis style is a steely minerality, a flinty edge that is both refreshing and ageworthy. Crucially, this is both classic and utterly modern. Everyone wants acidity, freshness and minerality now. “There’s something fine and pure about Chablis. It’s the style of the moment. It’s a very exciting time to be working here,” says Olivier Bailly, régisseur at Domaine Billaud-Simon, which was bought by Beaune’s Domaine Faiveley in 2014. The racy profile of Chablis is due to the coolness of the northern climate, and the Kimmeridgian clay soil, composed of 180-million-year-old marine fossils, on which the majority of the vineyard sits. This poor, stony soil on well-drained, south-facing slopes imparts a profile to Chablis which is utterly unlike the powerful, oaked whites of the Côte d’Or to the south. There’s an important difference between the Kimmeridgian soils and the less-sought-after Portlandian soils of the plateaux, on which most of the Petit Chablis vineyard is planted. Portlandian soil has less clay and marine deposits, resulting in fruitier, shorter-lived wines.

Consumer love affair Chablis is possibly the most-recognised white wine brand in the world. Of the 36m bottles sold, with an estimated value of €247m ($262m), 68% are exported. One-third of those go to the UK. The next most popular markets – Japan, Norway, the US and Germany – take about 8%

R E G I O N A L A N A LY S I S CHABLIS Export market shares

each. Asia is increasingly important. China imported 1.2m bottles in 2015, an increase of 55% in volume and 24% in value on the previous year; while red wine makes up 70% of Burgundy exports to China, Chablis is the second-biggest exporter of white Burgundy, with more than a quarter of the market. The Chablis council has noted the new, emerging Chinese middleclass market is one more interested in value for money than perceived luxury. “This is an excellent opportunity for Chablis, which has a wide range of wines,” it says. In the UK, sales are just as healthy, and America’s love affair with the seductive white shows no sign of abating. “It’s incredibly stable,” Charles Lea of the four-branch merchant Lea & Sandeman tells Meininger’s. “It goes on being in demand all the time.” During the slump of 2008 and 2009, when Mâcon and Saint-Véran sales dipped, “Chablis marched on as if nothing had happened. It’s a very strong brand.” Over in Washington, DC, Michael Sands of the retailer Calvert Woodley says sales are up 25% over 2015. “I think the increasing price of Burgundy the last few years has made more people revisit Chablis. We've sold more Chablis this year than any other appellation in Burgundy, red or white.” It’s an astonishingly successful story. The region retains its reputation for quality despite “being in every hotel and bar on the planet,” as Lea succinctly puts it (and despite, in much of America, “Chablis” having become a synonym for the most basic sugary whites). It has even transcended the iniquitous “Anything but Chardonnay” movement – any sommelier can quote the diner who asks for Chablis because they can’t drink Chardonnay. Hervé Tucki, the brand ambassador at La Chablisienne, the appellation’s single cooperative, puts it another way. “We don’t make Chardonnay, we make Chablis.” What La Chablisienne does and says is important, because this enormous company accounts for one-quarter of the output of the entire appellation. Of the 5,296 ha in Chablis, La Chablisienne controls 1,280 ha. “We are like a republic,” Tucki says. He adds – and he’s only half joking – “We are a dictatorship. We have one team and one opinion.” The company’s 280 producers have holdings ranging from a fraction of a hectare to 40 ha. Everything is controlled, Tucki says, from vineyard to finished bottle. Chablisienne might be big, but its philosophy of winemaking is reassuringly

30%

65%

Outside European Union

Proportion of

European Union (without France)

Chablis sales to foreign markets

artisan – “The more you do in the vineyard, the less you have to do in the winery. We practice slow winemaking here.” Much of the appeal of Chablis is its simplicity. It’s a one-grape appellation, and it’s self-contained. While the land is recognisably Burgundy – vineyards are divided into a chessboard of climats – Chablis comes without the terrifying prices and mindbending complexity of the Côtes to the south. There’s also a refreshing approach to the winemaking. “We’re simple here,” says JeanPhilippe Archambaud at Simonnet-Febvre, the renowned house which was taken over in 2003 by Maison Louis Latour. While he intervenes as little as possible and will never acidify or chaptalise, he is quite happy to use inoculated yeast. “I must be sure of my fermentation.” Even those like Michel Laroche, whose vineyards are fully organic, are remarkably undogmatic in the winery. Laroche, who stepped out of the mainstream in 2009 when he merged the company which bore his name with Les Vignobles Jeanjean to form the huge AdVini, retained about 20 ha of vineyard which he now farms as Le Domaine d’Henri. His wines are the essence of purity and precision. “Fourchaume has a reputation for fatness. Not mine,” he says. But he doesn’t worry about acidifying if necessary, and in the lean 2016 he added “a little bit of sugar.” As with so many ancient wine regions, Chablis is about evolution, not revolution – especially when it comes to oak. Traditionally, Premier Cru and Grand Cru are given a few months in used barrels, while Petit Chablis and basic Chablis are hardly ever oaked. Some winemakers eschew wood entirely. At Simonnet-Febvre – one of the few Grand Cru

SOURCE: DOUANES / IRI / BIVB / RAF

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35%

producers that uses no oak – Archambaud says classic Chablis “should have a green tinge. That is what Chardonnay on limestone gives you.” But there is a movement to produce wines in a more international, rounder style. “I have the feeling that the new Chablis generation tend to use more aged oak barrels than before,” says Thomas Pico at Domaine Pattes Loup, who epitomises that new generation. “A cellar without wood is not a proper cellar,” he says. His wines go into used barrels for up to 18 months, “to make the end palate rounder, and to give structure to the wine.” Pico rebels against the idea that “classic Chablis should taste of green apple – that is not Chablis for me.”

Price changes While there will always be winemakers willing to experiment with style, the unique selling proposition of Chablis is its stability. At the time of writing, the 2015 vintage is about to come on the market, and there will be price rises, especially at the top level. This is inevitable, as producers hold back stock in anticipation of the tiny quantities of 2016 they will have to sell in a year’s time. But it won’t be anything too dramatic. “Grand Cru will look expensive, but then again it’s been cheap for a long time,” Charles Lea says. “I don’t think I’m going to be very shocked by the prices.” As the great Burgundy crus get prohibitively expensive, Chablis – dependable, modern, affordable – is a very attractive proposition. Clever merchants are seizing the moment. “We’re doing a pre-en primeur Burgundy offer,” Tom Harrow of the wine club Honest Grapes said in mid-December. “We’re telling everyone, ‘Get your Chablis now’.” W

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SPECIAL REPORT MOLDOVA

Moldova: Continued success from Eastern Europe At ProWein 2017, the Republic of Moldova will showcase more than 350 outstanding wines, under the Wine of Moldova country brand, which has become a credible guarantee of quality.

t’s been three years since the newly established National Office for Vine and Wine (NOVW) presented its Wine of Moldova brand at ProWein in Düsseldorf. The trade visitors at ProWein 2017 will now be able to see for themselves what an enormous jump in quality the Moldovan wine industry has achieved since then. A record number of 35 Moldovan wineries will exhibit a new generation of wines, born out of ageold traditions, while inspired by modern winemaking technologies. The highlights of the Moldovan wine offer include wines blended with indigenous grape varieties, representative of the Moldovan terroir and responsive to the increased interest of wine consumers in discovering new tastes and styles.The Moldovan art of assemblage will be revealed during an interactive and innovative master class moderated by

Robert Joseph, one of the most interesting international wine commentator. Participants will also have the opportunity to make their own assemblage, out of internationally known varieties blended with local autochthonous varieties such as Viorica, Rara Neagra, Feteasca Neagra, Feteasca Alba, and Feteasca Regala, which express the character of the Moldovan terroir. In addition, visitors to the Moldovan stand at ProWein will have a unique opportunity to take virtual tours to the largest cellars in the world and visit Moldova’s leading wineries using virtual reality technology.

STRUCTURAL TRANSFORMATIONS Moldova has succeeded in completely rethinking and re-orienting its wine industry business model towards quality

and performance. Since the 2013 vintage, Moldova has had a quality system based on the EU model of protected geographical indications, covering the four growing areas of Valul lui Traian, Stefan Voda, Codru and Divin. A multistage monitoring system covers the entire production process: a national wine and vine register is being developed following European best practices and the organoleptic certification is done by authorized professional tasters. ‘Wine of Moldova’ became a quality sign legally enforced by the National Office for Wine and Vine (NOVW) and will be displayed on all wine bottles that have passed the quality control. This is a significant leap, because the ‘Wine of Moldova’ country marketing symbol is a further seal of quality, providing credibility to consumers. According to Gheorghe

Arpentin, director of the National Office for Vine and Wine, “Wine of Moldova is the wine of change and reforms, but also it is a promise and commitment to our business partners. NOVW is implementing complex marketing programs aiming to further support market diversification and export growth of quality wines.” Last year alone, Moldovan winemakers took part in ten international competitions and won 45 gold, 56 silver and 64 bronze medals, where only one third of all wines submitted were so awarded. Winemakers also participated in a large number of trade fairs from Germany to China, Japan and South Korea, where they presented new wines from their homeland, as well as at B2B events in Europe and the USA. Moldovan wine is now sold to around 50 countries, mostly in European Union markets, which have steadily increased since 2013 when Moldova and the EU entered an Association Agreement, which includes a Deep and Comprehensive Free Trade Area (DCFTA). This export growth into high-value Western markets was underpinned by the joint branding and marketing organized by NOVW under the Wine of Moldova country brand. The Republic of Moldova measures 33,843 square kilometres, but has more vineyards than the whole of Germany, covering some 114,000 ha. In the last years alone, some $798m has been invested in vineyards, cellar technology and marketing by the EU and other international organizations.

RESULTS AT A GLANCE

PROWEIN 2017: EIGHT WINES TO LOOK OUT FOR Moldova has gained a reputation as a producer of premium wines made for the international palate, while still preserving a unique touch by using regional grape varieties and transferring the local terroir and the skills of the young winemaking generation into the bottle. International visitors have the chance to learn more about the latest quality winemaking in Moldova by visiting Hall 15 booth G81. Here are eight wines to try: 2016 Chateau Vartely, Feteasca Regala, dry white A fresh and crisp white, delicate fruit with a hint of flintstone. It’s well balanced and the acidity is just right. 2015 Vinaria Bostavan, DOR, dry white This blend of Traminer and Chardonnay is a charmer, offering lemon zest and yellow fruit paired with a balanced mix of juiciness and acidity. 2011 Salcuta, Chardonnay, dry white A perfect example of how to do Chardonnay right; the oak is balanced, there is plenty of juice and acidity, plus hints of pineapple and lemon zest heading to a long finish.

Analyzing export volumes for 2016, the figures show a significant increase of Moldovan bottled wines going to China (+66%), Romania (+38%), Poland rewarded with the ‘2016 Voice of (+13%), Slovakia (+8%) and the Czech Wine’ award at the Amsterdam WBWE. Republic (+6%). By conquering these At ProWein 2017, the Moldovans are new markets, Moldova is seeking more seeking new customers from Germany, independence from Russia and the Central European countries, the Benelux former Soviet Union states, namely the countries, the UK, and Scandinavia. For CIS market. From a more than 90% share these markets, the excellent price/ quality two decades ago, exports to CIS states ratio should act as an incentive. now only stand for roughly 30% of Well-known wine personalities such as Moldovan bottled wines, which represent John Salvi MW from the UK have followed 40% of total Moldovan wine exports. the developments for some years and While bulk wine is still a significant have reached a positive conclusion: share of exports, its quality has also been steadily rising in recent years, “Moldovan wine has changed and I am

2016 Chateau Migdal P, Umbrella, Cabernet Sauvignon, dry rosé Grab a real umbrella and sit on a deck under the summer sun while you enjoy this fresh and juicy rosé. 2015 Purcari, Vinohora, Feteasca Neagra & Montepulcinano, dry rosé This rare blend is a serious rosé. Offering length and weight, it’s a food friendly style. 2014 Cimislia Wineries, Fiori, Feteasca Neagra & Syrah, dry red The Feteasca offers freshness, acidity and elegance, while the Syrah contributes backbone: look for hints of berries, wild cherries and spice. 2014 Et Cetera Winery, Serendipity, dry red Aromas of wild berries and plums meet well-balanced oak that contributes coffee notes. 2014 Purcari, Freedom Blend, Bastardo, Saperavi & Rara Neagra, dry red This blend of “underdog” varieties from Ukraine, Moldova and Georgia convinces with hints of dry red fruits, dried plums, red paprika, oak and coffee, all in balance and with a long finish.

impressed by it, especially the red wines, which bear the specifics of the terroir, differentiating them on the international market. Everyone has Cabernet Sauvignon and Merlot, while Moldova can stand out by its authentic wines made of local varieties.” Polish wine journalist and buyer Pawel Gasiorek adds: “The future for Moldova is to promote the local varieties such as Feteasca and Rara Neagra, which makes it stand out on the international market and become more interesting.This is the future!

SPECIAL REPORT MOLDOVA

WHAT MAKES MOLDOVA SPECIAL Many people are unaware that winegrowing in this small country dates back more than 3,000 years to the time of the Dacians. The white stork is the symbol of the Moldovan wine industry, as well as a symbol of the continual revival of Moldova, and is the subject of many local legends. The main country statement is: “Our wine has been crafted by generations of winemakers in the largest cellars in the world, appreciated by consumers in both east and west and supported by legends that everyone can embrace.” Perhaps it

is no coincidence that Moldova’s outline looks like a bunch of grapes, as wine plays a major role in the lives of its approximately 3m inhabitants. The Moldovans are also focusing on wine as their trump card in the development of tourism: The country’s attractions include the longest wine cellars in the world (created from former limestone quarries) with labyrinths that are more than 200 km long, as recorded in the 2005 Guinness Book of Records. Other attractions include numerous Orthodox monasteries and plenty of unspoilt nature and countryside. The biggest wine collection in the world, consisting of more than 1.5m bottles, is

SAVE THE DATE A NATIONAL WINE DAY The highlight of Moldova’s annual wine calendar is Ziua Vinului (‘Wine Day’) which offers a large program of wine tastings and folklore events on 7 and 8 October 2017.

Castel MIMI

Good food and good wine are coupled with warm Moldovan hospitality at Et Cetera winery.

The historic cellars of Milestii Mici

PHOTO: ROMAN RYBALEOV

stored at a depth of 80 metres, in Gothic style cases, in the underground galleries of Milestii Mici, situated just 10 kilometres away from the capital Chisinau. With its underground limestone galleries stretching a total length of 200 km and descending to a depth of 80 metres, Milestii Mici is a construction in the style of Moldova’s old feudal fortresses. These outstanding

CRICOVA BY VIRTUAL REALITY Come and explore Cricova for yourself! A set of Virtual Reality glasses are available on the Wine of Moldova stand, which will plunge you deep underground into Cricova, and also into other unique Moldovan wine attractions.

cellars include an area of 55 km of galleries where technological production processes are carried out, and some other dozens of kilometres, where wine is matured in barrels and bottles. Guests may travel through the galleries by car or by bicycle, or they can walk down the streets, called such names as Feteasca and OIV. Another striking symbol of Moldovan winemaking is the underground wine city Cricova, which has galleries stretching for 70 km. Founded in 1952, Cricova is Moldova’s biggest producer of sparkling wine using the traditional method. The National Vinotheque, an outstanding collection of legendary wines, is kept at Cricova, and include old vintages of Moselle, Bourgogne, Bordeaux, and Porto. The oldest wine in the collection, and the only one of its kind in the world, is the wine Easter Jerusalem, which was produced in just one batch in 1902. At least ten other wineries in Moldova have opened their doors to visitors, offering visits, tastings and in some cases overnight stays. The number of wine events and festivals is increasing every year. Their success is demonstrated by the fact that, in 2016, the number of foreign visitors rose by 19%. After several visits to Moldova, Robert Joseph believes

that “…Moldova has the opportunity to be a good blend philosophically between the best of the New World thinking – ‘Let’s try lots of different things – with some old-world respect for terroir and traditions”.

GET TO KNOW MOLDOVAN WINES Wine merchants, importers, restaurateurs, sommeliers and journalists who would like to know more about the new generation of wines from this exciting new region of Europe should mark the master class with the British expert Robert Joseph at 1 pm on 20 March in red on their calendars – along with Moldovan Night, which offers typical Moldovan finger food, presentations on the icon wines of various producers and some background information about the small major wine country of Moldova, from 6 pm on the same day at stand G81 in Hall 15. To register, please email: valentina.phillips@xenos-comm.de. More information about Moldova is available at: http://wineofmoldova.com/en

N E W S A N A LY S I S LOW ALCOHOL WINES

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A NEW APPROACH TO AN OLD PROBLEM Both Ancient Greeks and pot smokers have realised the value of lower-alcohol wines, reports Rebecca Gibb MW.

PHOTO: AFRICA STUDIO

hile two in three Americans are considered overweight, it’s boom times for Fitbit and CrossFit, kale and quinoa. Even McDonald’s sells salads. Food and drink companies face unprecedented pressure to divulge what’s really in their products, and the calorific content of alcohol – including wine – has inevitably come under the spotlight. The timing of this scrutiny over alcohol and calories couldn’t have come at a worse time for the industry – research papers have shown that rising alcohol levels in wine over the past 30 years aren’t a figment of the imagination. No wonder there’s been a rise in interest for lower-alcohol and reduced-calorie wines in the past decade. Although Weight Watchers has been making wines for dieters for 15 years, there has been a slew of releases in the past five years. The Real Housewives of New York star Bethenny Frankel launched the high-profile Skinnygirl range in 2012, and the appetite for guilt-free drinking appears to have not yet been sated. Thomson & Scott Skinny Prosecco sold out in its first week on sale in the London department store Selfridges in April 2016. Shoppers lapped up its assertion that it contained half the sugar of an average Prosecco (at 7g/L), and it went on to become the bestselling wine on the store’s website. The start-up company did not expect such an overwhelming response. Ian Thomson, creative director of Thomson & Scott, explained, “I remember looking at the 4,000 bottles we brought into the UK sitting in the warehouse and thinking, ‘that’s a lot of booze’. We sold out by June and we had to create a waiting list. We didn’t realise anyone would be so interested.” However, the rest of the market has not grown as quickly as early adopters hoped, as many lower-alcohol and lower-calorie wines have failed the taste test, creating a negative perception of the category. Yet, a Wine Intelligence report on low-alcohol wines conducted in 2016 showed 47% of those surveyed in Germany had purchased lower-alcohol wine (due in part

to the country’s production of wines naturally lower in alcohol) while Canada and the US were the fastest-growing markets for lower-alcohol products.

An old trend This ‘new’ trend for lower-alcohol wines has been here before, however. In the early 1970s, low-alcohol flavoured wines were the new Thunderbird. “The low-alcohol wines – given funky names to attract the hippie and dropout crowd of the late ’60s and ’70s – were known as ‘pop’ or ‘mod’ wines,” explains Thomas Pinney in A History of Wine in America. They enjoyed rapid success, “streaking from 3 million gallons in 1969 to 7.5 million the next year but as quickly faded.” Pinney also references an edition of Time, which suggested such wines “added a pleasant extra dimension to the effects of pot”. The appeal of low-alcohol wines soon shifted from Woodstock to Weight Watchers. An article in New York magazine in 1981 claimed, “the new light wines are aimed at the same calorie-conscious consumers who buy light beer and diet soft drinks…” The trend, the article explained, stemmed from the first ‘soft’ wines in the US made by German-born winemaker Ed Friedrich in 1975. Friedrich and others lobbied the California government to change an archaic law that wines had to have a

minimum of 10% alcohol. The law – a hangover from Prohibition days – was amended in 1980, paving the way for ‘innovative’ new products like Masson Light and Los Hermanos Light Chablis in the early 1980s. While the calorific content of wine is now viewed as an undesirable part of drinking wine, it has long been part of its appeal. It provided essential nutrition, and was often included in military rations from Roman armies to World War I troops. However, excessive drinking has been a problem as long as alcohol has existed, and reducing the alcohol level in wine was a common practice in Ancient Greece. Drinking wine neat was considered barbaric – perhaps because the strength of wines made from dried grapes was so high – and diluting wines, often with seawater, helped to prevent intoxication, as well as make the water more palatable. Today, it is the lower-calorie and loweralcohol wines that need to be more palatable to give them a chance at long-term success. The ‘new’ category has emerged in response to an unprecedented rise in wellness combined with a growing awareness of health and wellbeing. However, the creation of wines aiming to fulfil a smaller but similarly minded set of clients in the 1970s and 1980s shows this is not a novel idea. And, to drink moderately by reducing the alcohol content in wine is as old as Euripides’ plays. W

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C O M PA N Y P R O F I L E ALLEGRINI

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A DEEP-ROOTED LOVE OF WINE PHOTO: ELISABETTA TOSI

Allegrini Vini, in the heart of Valpolicella, was always a humble company. But then Giovanni Allegrini decided to shake things up. Elisabetta Tosi reports.

Villa Della Torre, Valpolicella

hat happens when you tell a child they can’t have something? His or her curiosity about the prohibited thing gets even bigger. That’s more or less what happened to Marilisa Allegrini. When she was a little girl, wine was forbidden to her and her brothers, Walter and Franco, despite the fact that their parents had a small vineyard. Whenever her parents left the room to accompany guests to the door at the end of the meal, she used to go around the table trying the wine left in each glass. Allegrini has never been a non-drinker, even when she was very young, and she still smiles today when she recalls these childhood episodes. As a grape-grower’s daughter, brought up in a winery in Valpolicella – close to Verona – it was almost inevitable that she had her first glass of wine early – in the past, it was almost a tradition in many Italian rural areas to initiate young children into it. And from those early sips has come a passion for wine that has helped create one of Italy’s most renowned wine companies.

Small beginnings When she first worked for the winery as a young woman, Allegrini remembers that the business was very humble, similar to those of

many other producers in the region. “A day a week of my time was enough to organise its papers, the documents, and the bureaucracy.” Today, the company has 120 employees. Its headquarters are in Villa Della Torre in Fumane, a small village in the heart of the Valpolicella Classico region. The manor house is a jewel of 16th century Italian architecture, surrounded by the Palazzo della Torre vineyard which gives its name to one of the company’s most famous wines. The family acquired Villa Della Torre in 2008, and nowadays it is both home to the company management and a meeting place with 10 luxury rooms open to Italian and European intellectuals. Apart from its 150 ha of vineyards in Valpolicella, the company has 98 ha in Tuscany and produces 4.3m bottles a year. In 2015, the company turnover was an estimated €30m ($32m). Landowners and farmers since the 16th century, the Allegrinis had lived through and helped to lead a winemaking revolution starting from the late 1960s and ‘70s, when Giovanni Allegrini introduced some major innovations. “My father hadn’t ever been to France, so, despite his passion, his knowledge of farming was as limited as almost any farmer [in the region], at that time,” says Marilisa Allegrini. “One day he had the opportunity to take a trip to the USA and visit California and

its vineyards. There, he experienced some new concepts, like the importance of the yield per vine, rather than per hectare.” Allegrini was also a pioneer in his belief in the potential of individual-vineyard wines, which were almost unknown in Valpolicella at that time. In 1979, he bought the La Grola vineyard in the hills of Sant’Ambrogio di Valpolicella, and in a major departure from tradition, began to train the vines using the double Guyot system recently introduced in Bordeaux, rather than the overhead pergola Veronese that was the custom in the region. “Giovanni’s goal was not making an Amarone, but a totally new wine, from richly concentrated grapes,” says Allegrini. That revolutionary change of mindset brought an innovative approach to every aspect of winemaking. When Giovanni died unexpectedly in 1983, before the release of the first vintage of La Poja – a wine made with grapes from the La Grola vineyard – his children took over the business. Franco was winemaker, Walter took responsibility for the vineyards, and Marilisa handled communications and sales. From the outset, they set out to pursue their father’s vision and ambition. This included following his lead in breaking with tradition in order to improve quality. In particular, Franco resented regulations that restricted the use of the Corvina grape variety to 60% and required the inclusion of the Rondinella and, especially, the Molinara, which he thought had far less potential. He wanted the freedom to make wines exclusively from Corvina, to include Sangiovese in blends and to experiment with other varieties. By the 1997 harvest, he finally got the chance to break away from the rules by releasing that year’s wine as a Veronese IGT rather than DOC Valpolicella. The Allegrini Palazzo della Torre had already become one of the most prestigious wines in the region, and the change had no effect on its sale. Indeed, the following vintage was included in Wine Spectator’s list of Top 100 wines of the year.

Company expansion While Franco’s efforts were focused on producing wines in Valpolicella, his siblings were also looking to innovate, and were eager to start something from scratch beyond the borders of their region. Thus, in the early years of the millennium, Marilisa and Walter began to explore the potential of Tuscany. They traveled along the coast until reached Bolgheri where, in 2001, they founded a new winery called Poggio al Tesoro. When it came to choosing which parcel to buy, Walter chose plots both on the hills and on land close to the sea, in order to diversify the planting of the grapes, which included Sangiovese, Vermentino, Cabernet Sauvignon, Cabernet Franc, Syrah and Merlot. Sadly, just a couple years after their purchase, Walter suddenly died. Marilisa did not give up on their Tuscan dream, however, and over the following years completed the planting of the vineyards. Furthermore – in partnership with Leonardo LoCascio, a prominent wine importer in the USA – another estate, San Polo in Montalcino, was purchased in 2006, and a winery was built following the newest trends of bio-architecture. Today, Allegrini owns 70 ha in Bolgheri and 22 ha in Montalcino, eight of which are intended to produce Brunello. Care for the environment is an approach the Allegrini family learned in Tuscany and initially applied to their Tuscan estates. This year San Polo will achieve organic certification, and the same will happen to Poggio al Tesoro in Bolgheri. “We are getting more and more convinced that sustainability and respect for the environment are the future of wine. That’s why we are also trying to apply this

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to develop wine tourism in their Tuscan approach in our vineyards in Valpolicella,” properties, introducing accommodation says Allegrini. facilities in Bolgheri and Poggio al Tesoro. Nowadays, you can find a bottle of Marilisa Allegrini also Allegrini in the most remote believes in the need to stand places of the world. In fact, since alongside other high-quality the beginning of their move Italian producers in an effort into exports, no market was to promote the image of Italian considered insignificant. “You wine. This has been translated can only claim to be a brand into strategic partnerships when your wine is everywhere, such as ISWA (Italian Signature or almost everywhere,” says Wines Academy), an association Allegrini. Today, about 90% of of wine companies founded the total production is exported, to support the Italian wine to 65 countries. “Your winery has sector and train future industry Apart from viticulture to be open all year leaders. The academy includes and wine, the Veronese wine long. If you are leading producers such as company is also involved in a prepared to work Arnaldo Caprai, Feudi di San number of other fields, of which hard and to talk Gregorio, Fontanafredda, culture is arguably the most about your wine, Frescobaldi, Planeta, Villa Sandi important. In 2013, Allegrini your family story, and Masciarelli. became a member of Intrapresae and your region Another organisation, Guggenheim Collection, a tirelessly, 365 days Altagamma, promotes Italian project supported by a number a year, success excellence abroad, by gathering of major companies with the cannot fail you.” together the most-prestigious aim of promoting cultural ‘Made in Italy’ brands in the exchange as an innovative form fields of industry, design, of business communication. In Marilisa Allegrini, fashion, hospitality, and food and the same year, to celebrate the Allegrini wine. Finally, Allegrini is also 30th birthday of their iconic a member of the the Famiglie La Poja and La Grola wines, dell'Amarone (the Amarone Families), a group Allegrini organised a special event at the of wineries in Valpolicella that a few years ago Solomon Guggenheim Museum in New York, decided to leave the regional consortium in introducing a limited edition of La Grola, order to fight to safeguard traditional values whose label bears a picture by the famous and high-quality standards for Amarone della Italian comic illustrator Milo Manara. Valpolicella. Another important partnership was sealed Her experience at Allegrini and her in 2014, when the Allegrini Amarone della relationships with other producers has Valpolicella was chosen as the ‘vin d’honneur’ given Marilisa some very clear ideas of the of the famous Hermitage Museum for the strategy that an ambitious, young, small following five years. In the famous Russian winery should ideally follow. “Nowadays, you museum’s council chamber, Marilisa Allegrini can no longer improvise. You have to start and Mikhail Piotrovsky, the general manager with a deep analysis of your strengths and of the museum, signed an agreement to weaknesses,” she says. “Exploit new channels develop a scientific and cultural collaboration – even the digital ones – to sell your wine. If to promote the relationship between art, you are just a small winery, be clear on what culture, and wine. you are and what you are doing. There is an Cultural events are also frequently held audience of people looking precisely for your at the Villa della Torre, ranging from wine wine – artisanal, natural, vegan or whatever.” tastings, food courses and cooking shows, She also advises producers to “forget to conferences and book presentations. Saturdays and Sundays. Your winery has to Giulio Romano’s Renaissance architectural be open all year long. If you are prepared to masterpiece is not only the ideal location work hard and to talk about your wine, your for these kinds of initiatives, but also as a family story, and your region tirelessly, 365 starting point for exploring the region. Over days a year, success cannot fail you.” W the next few years, the Allegrini family intend PHOTO: GIAMPIERO NADALI

With the freedom provided by IGT status, Allegrini modified the traditional Ripasso technique. Instead of simply following the recipe of adding dried Amarone skins to Valpolicella to start a second fermentation, he set aside a third of the harvest to be added to the finished wine at the end of the year. No Molinara was included at all. Another concern for Franco was the rot that sometimes developed on the passito grapes as they dried on the rafters of the winemakers’ attics. His solution lay in the construction of vast purpose-designed drying sheds with fans and dehumidifiers.

PHOTO: CEPHAS - CLAY MCLACHLAN

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C O M PA N Y P R O F I L E ROMANÉE-CONTI

A SACRED PLACE IN BURGUNDY If there is one place in the world that makes wine lovers swoon, it’s Burgundy. Sascha Speicher goes on a pilgrimage to Romanée-Conti.

ubert de Villaine does not look his age at all. Alert eyes, an almost light-footed step, his handshake is surprisingly firm given his slender, wiry figure. The now 77-year-old led the bid for the Climats de Bourgogne to become a UNESCO World Heritage Site. The successful conclusion of this bid represents a second lifetime achievement for the man who, for more than 40 years, has been in charge of the most famous domaine in the world: Domaine de la Romanée-Conti in Burgundy.

A wine treasure The vineyard in Vosne-Romanée has been in the de Villaine family since the end of the 19th century; in 1942, they sold half of the shares to their friends, the Leroy family. Since then, these two families have jointly operated the ‘Société-Civile du Domaine de la RomanéeConti’. One member from each family runs the business, currently Aubert de Villaine and Henri-Frédéric Roch. The company is overseen by a supervisory board, in which Henri de Villaine and Perrine Fenal also have equal

MISTER ALIGOTÉ Aubert de Villaine can work with more than Grand Crus. “There are not only Grand and Premiers Crus in Burgundy. Today, many of my colleagues work in supposedly easier locations in the same way in terms of quality. And that is very important for the region.” He and his nephew Pierre de Benoist, who now runs the Domaine A. & P. de Villaine in Bouzeron, are part of this group themselves. De Villaine has devoted the vineyard primarily to the Aligoté grape, as he is passionately committed to improving its reputation. His decades-long commitment made a decisive contribution to the creation of the Bouzeron appellation, the only communal appellation for this grape variety in Burgundy, in 1997.

representation. Perrine Fenal is the daughter of Lalou Bize-Leroy, who was joint manager with Aubert de Villaine between 1974 and 1991, before leaving to found her own vineyard, the now world-famous Domaine Leroy. Since 2008, de Villaine has been preparing his nephew, Bertrand de Villaine, to follow in his footsteps — Aubert and Pamela de Villaine have no children of their own. But they do have other vineyards — one in Côte Chalonnaise, along with the joint venture HdV (Hyde and de Villaine) in Napa Valley, California (Pamela is a member of the Hyde family).

The name Société-Civile du Domaine de la Romanée-Conti is written on the plain doorbell panel of the company’s headquarters in VosneRomanée, as if it were a tax consultancy or a doctor’s office. About three years ago, the domaine moved to the historic winery of the monks of Saint-Vivant. It was with them that the glorious history of the vineyard, at that time known as Cros des Cloux, began in 1131. Only later did it become Romanée-Conti. The offices are now located in this historic place, and the 2015 vintage is stored in the cellar in mainly new barrels. The wine store, shipping

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C O M PA N Y P R O F I L E ROMANÉE-CONTI

department and offices for the outdoor operations are located about 200 metres away. In a third building in Vosne-Romanée is the cellar housing presses and fermentation vats where the 2014 vintage is currently waiting in barrels to be bottled. “We only bottle the wines when the moon is both waning and descending, and in high-pressure weather conditions. This may be the case in January 2017, but it could also be April. There is no pressure,” explains Aubert de Villaine. There is certainly no sales pressure. Customers wait patiently for their allocation. However, being a sales partner of the most famous vineyard in the world also has its pitfalls. What at first appears to be like getting all six numbers on the lottery every year, proves to be highly complex during the daily business of distributing the wines on the market. Albert Kierdorf, owner of KierdorfWein and a specialist in high-quality Burgundy, took over sales and marketing for the German market at the beginning of last year. This is a diplomatic mission, because the guidelines are very strict to prevent speculation and ensure that 80% of the wine is sold to top restaurants and drunk there rather than being sold on abroad. To make matters worse, only very small volumes of the current 2012 and 2013 vintages are available. Anyone who orders a bottle in a restaurant and hopes to take the empty bottle home as a trophy will be disappointed. Sommeliers are instructed to destroy the empty bottles in order to prevent counterfeiting. The de Villaines are resolutely leading the fight against fakes. All the bottles have an anticounterfeiting seal, similar to euro banknotes. All the corks show the vintage, the name of the winery, and the initials of the vineyard. Since the 2012 vintage, a thin layer of beeswax The approximately 28 ha of vineyards are spread over the following Grand Cru locations: Romanée-Conti (monopole; 1.81 ha) La Tâche (monopole; 6.06 ha) Richebourg (3.51 ha) Romanée-Saint-Vivant (5.29 ha) Échezeaux (4.67 ha) Grands-Échezeaux (3.53 ha) Corton (2.27 ha) Le Montrachet (0.68 ha) Bâtard-Montrachet (0.13 ha)

on the cork has prevented direct contact with the metal capsule, thereby protecting against bacterial infections. A similar process is also used for the barriques, whereby the staves around the bunghole are also coated with beeswax. This helps to keep the area around the barrel opening hygienically clean. Absolutely everything is done to ensure the quality—in the cellar, and of course, especially in the vineyard.

change, and one week is due to the improved management of the vineyards,” he says. “This has caused a slight reduction in the yields, which also means that the grapes ripen earlier. Thanks to biodynamic management, however, we still have an ideal balance in the vineyards.” De Villaine also strives to achieve

The moon connection In 1988, de Villaine, motivated by his friend Nicolas Joly, started his first trials using biodynamic methods, having already cultivated the vineyards using organic methods since 1985. By 2006, 7 ha were part of a long-term trial, and by 2007, the domaine officially switched to biodynamics. Today, the vineyard soils look healthy and fertile: the earth is loose, with a harmonious mixture of light limestone and red-brown clay soil. In general, there is a great deal of experimentation. This includes the planting density, which is usually 11,000 vines per hectare at Romanée-Conti. The vine spacing is 1 metre by 90 centimetres. Two small parcels in the Crus Romanée-Conti and Grands-Échezeaux were planted with a higher density of 14,000 vines per hectare, but de Villaine was not satisfied with the result. “It has been shown that a true balance cannot be achieved in the vineyard at this density. Vine training becomes very complicated.” When parcels have to be replanted, this is done only using their own vine material. But such new plantings are delayed as long as possible. “Of course, old vines are important to us. That is why, in 40-, 50- or 60-year-old vineyards, we prefer to replace individual vines before we actually tear out and replant an entire parcel,” explains de Villaine. “Biodynamics helps us, because it acts like cell therapy for the old vines.” Nicolas Jacob, who had already gained experience with biodynamics before his involvement with Romanée-Conti, has been responsible for managing the vineyards since 2007. At Romanée-Conti, harvesting now takes place on average three weeks earlier than in the 1970s. “At that time, we started picking on 8 October. Now it is 15 September. But this is not only due to climate change. I would estimate that two weeks are due to climate

Deep inside the cellar.

even offered for sale. “We have only 13 ares, which produces around 400 bottles. Such a tiny amount would turn the wine into a purely speculative item. That makes no sense. We drink the bottles here at the domaine when we welcome guests.” And this is indeed the case: the 2000 Bâtard-Montrachet is a Chardonnay with an incredible lushness and maturity, with ripe aromas from white nougat to limeblossom honey. The only white wine from Romanée-Conti that is sold on the market is Le Montrachet, from the most famous white wine vineyard in the world. However, the quantity is also extremely limited, as the wine is grown on ‘only’ 68 ares, meaning that only a few bottles are available on each market. It is therefore traded at similarly high prices to the red wine icon Romanée-Conti. Both wines cost several thousand dollars, whether they appear on a wine list or in a catalogue.

The terroir

THE WINES: Corton Grand Cru Echezeaux Grand Cru Grands Echezeaux Grand Cru Romanée Saint-Vivant Grand Cru Richebourg Grand Cru La Tâche Grand Cru Romanée-Conti Grand Cru

The Romanée-Conti Grand Cru, the vineyard with the same name as the domaine, is a monopole (an area controlled by a single winery) measuring 1.81 ha. It is a place of pilgrimage for wine enthusiasts from all over the world who want to be photographed in front of the wall with the famous lettering. Today, many prefer to take a selfie with Romanée-Conti. The constant comings and goings are easy for the domaine to follow as the vineyard is within view. De Villaine has been asked a thousand times what the secret is of this at first glance seemingly unspectacular location at the foot of a hill. “Nothing special, just good drainage, an ideal soil thickness, not too much and not too little, underneath which is limestone with hairline cracks that allow the roots to penetrate into the rock. This was never more evident than in 2003, when all the vineyards suffered under the immense heat and the leaves were wilting. Except Romanée-Conti.” The second monopole, La Tâche, is practically the company’s calling card. With more than 6 ha under sole ownership, it is the most widely distributed wine of the domaine. This provides the best opportunity to discover a reasonably affordable bottle at a restaurant or from a dealer. The “most affordable” wine in the programme is Corton. This is the only wine that is not aged entirely in new barrels,

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this balance in the wines. “Wine has the fantastic ability to catch up on the last percent of ripening in the bottle if the grapes have not yet reached 100% of their phenolic ripeness when harvested. We always try to harvest perfectly ripe grapes, but they are never overripe. Very slightly green components lift the tension and provide freshness.” Vinification is carried out by cellar master Bernard Noblé, always in consultation with the family. Noblé is in a highly unusual position. His cellar receives grapes from 28 ha of vineyards spread over nine Grand Crus, whereby the ninth, Bâtard-Montrachet, is not

Aubert and Bertrand de Villaine

and also the only red wine from the Côte de Beaune. De Villaine and his colleagues managed to lease the 2.3 ha of vineyards in 2008, the last time the domaine was expanded. In exceptional years, a VosneRomanée 1er Cru Cuvée Duvault-Blochet is also bottled – the winery’s only wine that is not a Grand Cru. If you are lucky enough to get hold of one of the domaine’s bottles, then comes the inevitable question: what is the ideal age of the wine to open the bottle? De Villaine considers and answers, “A safe time window for a Grand Cru from the Côte de Nuits is an age of about 15 years. Say 1997, for example, or 2000. They would now be at their best. But the wines can also be great fun when they are younger. They are open and full of power before they close for a few years.” A bottle of La Tâche 1997 provided liquid proof of this statement, with fine raspberry and blackcurrant fruit, undergrowth notes, liquorice and black tea, succulent, and with ripe but full tannins, good muscles, but no fat, unaged, but delicately matured. But whatever the age, a bottle from Domaine de la Romanée-Conti is reminiscent of the closing scene of Sideways: there is no need to wait for a special occasion, because the wine is the special occasion. This article first appeared in Germany’s Sommelier magazine, published by Meininger Verlag. Sascha Speicher is editor-in-chief. W

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MARKETING SULA

WINE HEADS TO THE PARTY India’s SulaFest, organised by a major Indian winery, now attracts more than 10,000 people. Robert Joseph went along.

ow do you introduce wine into the lives of young people in a country like India, where wine has no cultural roots? The customary answer is ‘education’. Somehow, future consumers must be encouraged to sign up for courses on regions, grape varieties, and food and wine matching.. In 2008, Rajeev Samant, founder and CEO of Sula Vineyards in Nashik, had a better idea. He decided to mark the tenth anniversary of his wine business by hosting a concert in an amphitheatre set among the vineyards. Unlike countless wineries such as Robert Mondavi Winery and Leeuwin Estate, which tend to host the kind of performers and orchestras that fill smart London and New York concert halls, the shaven-headed, Stanford-educated Samant opted for the style of event he would personally have liked to attend, that might take place somewhere like Goa or Ibiza. “To be honest,” he says, “I just liked the idea of having a really great party with the music I liked and a lot of great people.” SulaFest, he decided, would showcase top Indian DJs and young local musicians such as Shaa’ir and Func, an alternative electronic music duo who had only got together the previous year. There would be food and drink tents, a grape-stomping stall, cooking-with-wine demonstrations, and the presence of Kunal Vijaykar, one of India’s best-known TV chefs.

But the main attraction would undeniably be the music. Samant being Samant, he made it happen. But booking the acts was easier than getting the audience. The biggest challenge lay in the distances people had to travel. According to a map, Nashik is only 180 km from Mumbai, but as I discovered when I visited the winery as part of a group of India International Wine Challenge judges, those kilometres were not like the ones in Europe or the US. The drive took well over four hours along a less-than-fully asphalted two-lane road, which we shared with horses and carts, un-roadworthy trucks, and wandering dogs and cows. We were kindly invited to stay in Samant’s house, but it was clear that comfortable nearby hotels were less than plentiful. And yet, 300 people came to the first festival.

Calendar fixture Since that first SulaFest, things have changed. Today, the drive still takes twice as long as it would in the West, but the road is safer. Like many other Indian cities, Nashik now has a range of recently opened hotels from a Hotel Formule 1 to a five-star Taj Gateway, and SulaFest now runs for three days, boasts three stages, and attracts more than 10,000 attendees. The event has been listed by the Hindustan Times as one of ‘Nine cool Indian

music festivals to attend’, and among the acts booked for 2017 were world-class bands like Bloc Party and Afro Celt Sound System from the UK. This year also saw the opening of a 15-room hotel with rooms designed by Samant’s Russianborn wife, Margarita. Another change, unconnected with the festival, has been the creation of an import business called Sula Selections, which distributes imported brands including Trapiche, Hardys, Bouchard Aîné & Fils, Ruffino, Cointreau, Hendricks, and – to declare a personal interest – the French brand of which I am co-owner. My official reason for being at SulaFest was to pour our wine for VIPs, potential customers, and Indian wine-opinion-formers like Subhash Arora and Reva Singh of Sommelier India magazine. Unofficially, I wanted to enjoy some great music and get closer to India’s growing wine market. Over the three days, I met property developers, film-makers, students and secretaries. Some had no taste for wine; others were just discovering it; while a few – a very few – were obviously passionately interested. One young woman earnestly grilled me over the difference in the flavour of a Languedoc Chardonnay-Viognier and a Bouchard Aîné white Burgundy. There were also tables at which Coke, beer and Chenin Blanc were all being casually quaffed with hamburgers. Despite the occasional display of passion, I’m pretty certain that the festivalgoers who drank any wine at all were almost certainly in the minority, just as they are in most British pubs on any Saturday evening. Indeed, many more probably enjoyed fruit juice from RAW, the festival’s headline sponsor. Thanks to SulaFest, however, barriers to entry to wine have been removed. Wine isn’t presented as complicated stuff that needs a degree before it can be approached; it was on offer as a drink. And, with any luck, that’s the kind of thing that will help increase India’s wine consumption, which as some might find sobering, is still less than a tenth as much as China. W

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CELEBRATING AUSTRALIA DAY The room was buzzing at the latest Australia Day tasting, as artisan and premium winemakers showcased their wares. Felicity Carter had a taste.

he mood at this year’s annual Australia Day tasting in London was buoyant. The event, timed to coincide with Australia’s national holiday, is a chance for the country to showcase what it’s been up to, to the allimportant UK trade. It’s the biggest tasting of Australian wines held outside the country, and this year, 230 wineries poured nearly 1,100 different wines. The 2017 tasting was a little less formal than in recent years, and there were more winemakers pouring for a larger number of young sommeliers. Notably, there were also a lot more expensive wines, ranging up to £160.00 ($200.00) a bottle. Laura Jewell MW, who was appointed the UK head of Wine Australia in 2014, says that Australia is now unashamedly shifting its focus towards more premium offerings.

The big boys The issue for Australia’s smaller producers has been that Australia’s perception abroad is often dominated by the offerings of the big producers, such as Accolade, Treasury Wine Estates and Casella Wines. While the major companies also make some of Australia’s most prestigious wines, they are largely known for their almost unmatched ability to deliver large volumes of popular, massmarket brands; the prevalence of brands like Yellow Tail has caused Australia to be seen mainly as the home of supermarket wines. Winemakers chasing Parker Points by making high-alcohol, syrupy Shiraz didn’t help either, and nor did an unprecedented

rise in the Australian dollar between 2010 and 2013 to parity with the US dollar. But the Australian currency has returned to previous levels, smaller Australian winemakers have made more overseas visits, and – more importantly – the big companies, who provide so many of Wine Australia’s promotional dollars, are backing Wine Australia’s goal of promoting artisanal and premium wines. “A lot of the independent retailers are coming back to Australia as delivering value for money,” said Jewell. “There are just so many stories we can tell, such as our alternative varieties and old vines.” According to Wine Australia figures, sales to mainland China are up 40% in value and 45% in volume. Sales to the US increased by 3% in value, while those to European markets like the Netherlands, Sweden and Norway are up by between 2% and 3%. The famously price-sensitive UK is still Australia’s largest market in terms of volume, not value, although Jewell says that “exports at the bottom end have declined. We are really seeing a big increase at the top end.” Overall, while Australian exports rose 7% in 2016, to A$2.2bn ($1.7bn), significantly, volume only grew by 1%. The international media has also been increasingly positive. Following a recent trip, noted American writer Jon Bonné noticed a philosophical shift to a concentration on a sense of place, after “a 50-year reliance on building its wine industry by relying on scale and reputation rather than Old World notions like terroir.”

Overarching strategy A food-and-wine tourism strategy rolled out by Tourism Australia at the end of 2013 has also helped. Since the campaign began, winery visits have risen by 28%, attracting an annual figure of 970,000 international tourists. Some of these visitors apparently get a shock. An Australia Day Adelaide Hills Chardonnay masterclass demonstrated the elegance and freshness of cool-climate Australian winemaking. The wines had natural acidity from the mild summers and cool winters – a climate of which few outside the country seem to be aware. Moderator Mark Davidson from Wine Australia joked, “I take a certain amount of perverse pleasure” at seeing American journalists arrive in the Adelaide Hills without any warm clothing. “In the cold nights of the Adelaide Hills, they freeze.” It was clear that the wineries and winemakers at the event were feeling optimistic. But Australia still faces some challenges in the UK. One winery executive privately confessed that the low pound was causing retailers to pressure producers to lower their prices, in order to maintain their margins. Wineries face a tricky dilemma – if they bow to this pressure, their own margins will suffer. And when the pound goes back up, they may struggle to raise their prices again. If it’s to get its most interesting and compelling wines into the UK, Australia will have to focus on the on-trade, as Jewell acknowledges: “It’s glass by glass.” W

Volume XII · Issue 1 · February 2017 Editor-in-Chief Felicity Carter, Phone: +49 6321 890879-25, Email: felicity.carter@wine-business-international.com Editorial consultant Robert Joseph Sub-editor Scott Saunders

Marketing Manager Jörg Sievers, Phone: +49 6321 8908-67, Email: sievers@meininger.de Production Horst Emmert Conception Prof. Hajo Sommer

Publishers Andrea Meininger-Apfel, Christoph Meininger Design & Layout Steffen Heppes Contributors Subhash Arora, India; Eduardo Brethauer, Chile; Wojciech Brońowski, and Correspondents Poland; Bob Campbell MW, New Zealand; Jung Yong Cho, Korea; Michael Fridjhon, South Africa; Eugene Gerden, Russia; Leslie Gevirtz, US; Dr Caroline Gilby MW, UK; Dr Jamie Goode, UK; Mathilde Hulot, France; Panos Kakaviatos, France; James Lawrence, UK; Adam Lechmere, UK; Daniel Lopéz Roca, Argentina; Jürgen Mathäß, Germany; Anton Moiseenko, Russia; Roger Morris, USA; Dr Hermann Pilz, Germany; Jeni Port, Australia; Treve Ring, Canada; Scott Saunders, USA; Michèle Shah, Italy; Jeff Siegel, USA; Sascha Speicher, Germany; Elissaveta Velianova, Bulgaria; Larry Walker, USA; Richard Woodard, UK. International ARGENTINA/CHILE: Diego Eidelman, Bulnes 1785 P.8 C, C1425DKC Sales Representatives Buenos Aires, Phone : +54 911 56175036, Fax: +54 11 48280622, EMail: diego@clubsycountries.com  AUSTRALIA: InterMedia Worldwide, Mike McCorry, 105 Albion Street, Surry Hills, Sydney NSW 2010, Australia, Phone: +61 29211 1690, Fax: +61 29280 2893, Intermediaworld@mac. com  FRANCE: Ute Schalberger, Gladbacher Str. 44, 50672 Köln/Germany, Phone: +49 221 58 91 93 93, Email: ute.schalberger@t-online.de  ITALY: Ediconsult Internazionale, Piazza Fontane Marose, 3, I-16123 Genova, Phone: +39 010 583684, Fax: +39 010 566578, Email: wine@ediconsult.com  SOUTH AFRICA: Pietman Retief/Catherien Tredoux, 20 Jonkershoekweg/Rd, Stellenbosch 7600, South Africa, Phone: +27 82 554 1476, +27 83 273 2232, pietmanretief@absamail.co.za, catjan@vodamail.co.za  USA: Hans J. Niebergall, Director Marketing USA, 474 N Bedford Road, Bedford Hills, New York, 10507, Phone: +1 914 708-6241, niebergall@niebergall-law.com

Cover Image Rob McMillan Interview photos: Robert McClenahan Printing PVA, Landau, Germany Publishing House MEININGER VERLAG GmbH, Maximilianstrasse 7-17, 67433 Neustadt, Germany, www.meininger.de WINE BUSINESS INTERNATIONAL Maximilianstrasse 7-17 67433 Neustadt, Germany Phone: +49 6321 89080 Fax: +49 6321 8908-14 Email: contact@wine-business-international.com www.wine-business-international.com MEINGER VERLAG shareholding: Andrea Meininger-Apfel (45%), Christoph Meininger (45%), Peter Meininger (10%) Publishing Frequency bi-monthly

MEININGER’S WINE BUSINESS INTERNATIONAL is available on subscription at 132€ a year. www.wine-business-international.com ISSN-Nr. 1867-352X

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Trapiche Nueva Mayorga s/n, Maipú, Mendoza, Argentina Tel: (54) (0)261 5207605 www.trapiche.com.ar

VINA ALMAVIVA Almaviva Winery Av. Santa Rosa 821, Paradero 45 Puente Alto - Santiago, Chile www.almaviva.cl

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COLUMN NEXT ISSUE

THE DEATH OF THE EXPERTS

resident Trump doesn’t have much time for experts. “The experts are terrible… They say, ‘Donald Trump needs a foreign policy adviser.’ Supposing I didn’t have one…” he asked a pre-election audience in Wisconsin, “would it be worse than what we’re doing now?” The new leader of the free world has several soulmates on both sides of the Atlantic. Early last year, the leading proBrexit British politician Michael Gove responded to a barrage of data from economists and academics suggesting that leaving the EU would be bad for the UK economy by declaring that “people… have had enough of experts”. His comment was greeted with derision, but as with Trump, it was Gove and the Brexiteers who had the last laugh when the referendum Robert Joseph is recog votes were tallied. Six nised as one of the months later, on BBC world’s most interesting radio, Gove contrasted the commentators on wine. views of “those who call themselves experts in fields like economics and the social sciences” with the “reliable wisdom of crowds”. There is nothing new in politicians relying on crowds, but most commercial businesses have traditionally been dependent on experts – think of the carefully nurtured relationship that has long existed between travel, food and wine businesses and critics. However, all that is changing very quickly. It is a rare hotelier today who’d rather have a major review in a glossy magazine than a TripAdvisor Travelers’ Choice award. An increasing number of hotels prompt customers to post reviews by stapling TripAdvisor cards to their bills. The closest wine equivalent to TripAdvisor is Vivino, whose 22m users have collectively posted over 3.5m reviews. Wine producers who previously looked no further than a review from a print media critic or blogger now increasingly talk about their Vivino ratings, some of which vary quite widely from the ‘experts’. Over 30,000 Vivino users gave a Napa blend called The Prisoner 4.3 points out of 5. Lettie Teague of The Wall Street Journal, by contrast, described it as a “ripe… pricey dud”.

One high-profile critic, Robert Parker’s former associate Antonio Galloni, acknowledged the power of peer reviews last December by buying an app called Delectable, which is used by 120,000 people every month to scan bottles of wine and review their contents. The under-reported part of Galloni’s purchase was an associated business called Banquet that came with it. Launched in 2015, Banquet enables wine drinkers to purchase wines directly from top independent retailers like Kermit Lynch, simply by using their phones. Historically, wine writers and wine publications have balked at the idea of facilitating sales. But purist critics are increasingly struggling to make money from their words. Paul Mabray, the US vinous social media consultant, recently estimated that there are now fewer than 25 ‘super-critics’ with an audience of 100 or more people. Mabray’s professional experience at Vintank involves tracking online conversations, so his apparently conservative figure deserves respect. Lettie Teague is an exception in being able to make a living directly from wine criticism. Most of her colleagues rely on public speaking and initiatives such as charging producers and distributors for the use of their ratings. These fees, however, are chicken feed when set against the kind of return Galloni and the owners of Vivino might hope to get from their investments, as they eye the $74m profit pocketed by TripAdvisor and its subsidiary brands derived in 2015 from accommodation, restaurant, and tour bookings by some 350m consumers. Platforms exclusively focused on wine will never rake in the sort of money available to their counterparts in the travel sector, but just as the music platform Spotify makes a profit from the sale of concert tickets, as well as advertising, digital downloads and subscriptions, there are various income streams to explore. Wine companies that once channelled sizeable budgets towards glad-handing wine writers without any clear idea of the likely return on that investment may be very happy to reallocate those funds towards businesses that offer a direct line to potential buyers. Vivino already makes regular wine offers to its users, and users of Antonio Galloni’s Banquet app have access to 20,000 different wines. How many other ‘experts’ are considering ways of putting their toes into the waters of retail commerce? With or without the help of crowd-sourced wisdom?

IN THE NEXT ISSUE

POWER LISTS: NORWAY The Scandinavian country of Norway boasts a population of enthusiastic wine drinkers. So who are the most influential people working in the Norwegian industry today?

BEST PRACTICE PACKAGING How do you make your wine stand out in a wine store that may have hundreds of other wines for consumers to browse? We take a look at some of the latest packaging initiatives.

WHAT’S HAPPENING IN HOLLAND The Netherlands has traditionally been seen as a low-value market, but what happens here is often a sign of what is going to happen elsewhere. Our correspondents look at recent trends.

WHAT DOES IT COST? The wine world is rushing towards sustainable practices like biodynamics. But what does it cost to convert, and when will you see the money back? Biodynamics authority Monty Waldin gets out his calculator.

NEXT ISSUE

VOLUME XII ISSUE 2 · MAY 2017 PUBLICATION DATE: 5 May 2017 ADVERTISING DEADLINE: 13 April 2017

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