Affordable Luxury

I have always been interested in consumer products, and especially the middle market of affordable luxury. Things that are special, but that don't have the prohibitive cost structure of "true" luxury. Wine is a category that spans many price points (e.g., the bottles of Andre my roommate and I would buy in college to the Rothschild wine that discussed last class), but in nearly every scenario that it is consumed, it is a luxury of the moment. It's generally not a drink people consume out of necessity or for the health benefits, but because there's enjoyment in it. It's not only a product, but an experience.

I am excited to learn about the history of the industry, how labels get consumers to increase their purchases (e.g., either with increased quantity or buying a higher price point bottle), and generally how the industry things about selling to consumers who are largely uneducated about the differentiation in products. 

Lebanon's Native Grapes: Obaideh and Merwah

In 2017 Forbes published a two-part series on the history of Lebanese wine production titled, "Lebanon: The Greatest Food & Wine Country You've Never Visited". In the first part of the series the author runs through a summary of the country's turbulent political past (and present) and in the second focuses on the market's top producers. According to their assessment, Chateau Musar is the most internationally well-known Lebanese wine producer.

"Lebanon’s most famous producer and the one best known in the States is Château Musar. While the Musar Red has long commanded the highest price in their portfolio, a tasting of Musar’s white from vintages back to the 70’s demonstrated the underappreciated potential of Lebanese indigenous grapes Obaideh and Merwah." 

Learning of Musar’s popularity and reach was no surprise, particularly given that it was revived by an heir who immigrated to the West, made a fortune and presumably connections, and had come back to Lebanon to revive the family business.

However, I was surprised to learn that Lebanon has indigenous grape varieties: Obaideh and Merwah. Upon looking into this a little more deeply I found that Obaideh (or Obeidi), described as a “white-wine grape…used to make traditional blends and varietals,” is also used in the production of Arak, a traditional Lebanese liqueur that tastes of aniseed (I mentioned this drink in my previous post, unaware of the link). The flavor profile and treatment of the grape is described as follows:

“high in sugars and low in acidity and often yields wine with a creamy texture and flavors of honey and lemons. It responds well to oak aging and, when vinified with care, is capable of aging for many years. Obaideh has an unproven relationship with Chardonnay and Semillon and is typically blended with Merwah, another Lebanese variety.” (Wine Searcher)

According to the team that runs Chateau Musar, the Obeidi grape is so well-adapted to the regional and environmental characteristics that they do not intervene in its growth in the slightest (from Just Grapes: “no canopy management, no pest control, no irrigation”). This contrasts with “minimal intervention patina” used in other wineries elsewhere in the world. Chateau Musar grows these grapes on their own roots (rather than on grafted rootstock) in chalk soil and calcareous gravel and harvests the grapes when they are ripe (not necessarily at night, which is the more common time to pick grapes in hotter climates).

The result of this grape varietal and these growing and aging practices is generally a more oxidative quality to the wine. Brief research on oxidative wine (and commentary on Musar’s products) has revealed that, perhaps like many other characteristics of diverse wines, this is an acquired taste. According to a Brooklyn-based sommelier “Some winemakers insist that, yes, controlled oxidation can add richness, complexity, and desirable, umami-driven aromas and flavors to white wines in particular. If preventing oxidation highlights primary notes like fresh fruit, floral, and herbal notes, oxidative winemaking does the opposite, bringing layer upon layer of savory, earthy, nutty aromas and flavors to the wines. The key is balance.” If the winemakers expose the wine to too much oxygen then it may entirely damage the wine, making it oxidized rather than oxidative.

Distributors - a serious problem?

Related to our last class, I found our discussion on distributor consolidation pretty interesting. While I can understand the general argument that big distributors tend to forget about their smaller customers, I still can't believe such is the case with regards to the wine industry. Prohibition era booze laws and mob-esque middle-man muscle definitely play roles here, but I’d imagine the customers – i.e. the retail buyers and end consumers – are significant mitigants. There is a trend towards variety, “finds,” and smaller brands, much as is occurring in the beer industry. Mid to premium users feed off the cultural value and pseudo-intellectual points they gain from drinking smaller batch wines. Something to keep in mind when industry participants are bemoaning their distribution channels – it could be a lot worse! Market forces are providing significant tailwinds, which makes me question just how much of a problem distributors actually pose.