The New Yorker has an interesting story on Ningxia, an emerging wine region in China. It's one that connects with this week's theme of brand management, and draws parallels to Mondavi's brand development: https://www.newyorker.com/magazine/2018/03/12/can-wine-transform-chinas-countryside
The article describes the history of Ningxia, and juxtaposes its historical "backwardness" with its emergence as an increasingly successful wine-producing region. It's a story that shows a transformation of a community in the process of engaging with a completely foreign product.
Most interestingly, the article describes the multiplicity of purposes of wine producing for the region and its people. The author first describes how government edicts and politics influenced the wine import business in China. After the premier toasted the national congress with wine in 1996, for example, wine exports soared. In addition, the local governments wanted to support wine production, especially those along rivers that had the resources to grow grapes. In part, this was seen as a typical status symbol deriving from connections with Western products.
But wineries were also seen as positive for the powerful local governments. For one, the governments had strong incentives to grow the wine business big and fast to collect more taxes. In addition, the wineries would serve as tourist attractions as the Ningxia region chased the concept of "the Bordeaux of China". The region constructed faux chateaus that would serve as focal points for tourists, similar to Mondavi's plan to draw people into his winery with art and music.
Yet, the initial success in China was also an opportunity for counterfeit wines to surface. Often people would take old bottles and fill them up with fake wine. This was easy, because people didn't know what it was supposed to taste like, so fake producers could get away with it.
This story connects well with our theme this week of brand management. In particular, this region seems to be doing a good job defining itself as a superior place to grow wine. This is in part reflected in the awards it has won, such as the top award in its category at the Decanter World Wine Awards. Yet, it still struggles with how to define itself and price in a way that maximizes value.
One of the challenges of the region will be to focus the brand, and not fall into the trap of overextended brand expansion that Mondavi seems to have fallen into. This will be made more difficult as the region becomes more successful and more inexperienced copycats want to join the market. Perhaps the local or national government will get involved at some point to certify or classify wines to help world consumers determine quality – after all, China's authoritarian government would make this much easier than in Western countries.
Wednesday, March 7, 2018
Virginia wine (part 1 of 2)
I spent last weekend back in Charlottesville, Virginia to show off to a few friends the beautiful and booming Virginia wine, beer, and cider industry. Or, as I came to learn, the Virginia wine and beer industry, as cider is legally classified as wine. Because there is just so much about Virginia wine that I'm excited to talk about, I'm writing this blog post in 2 parts: (part 1) the mind-blowing growth of the Virginia wine industry and (part 2) Virginia craft cider and its (possibly) inevitable nation-wide expansion. So...
Part 1: The Mind-blowing Growth of the Virginia Wine Industry
Most (if not all) of you heard me gush over the Virginia wine industry for my mid-term presentation. In summary, in case you missed it, demand for Virginia wine is far outpacing supply. And the number of wineries and vineyards is exploding. When I graduated from UVA 3 years ago, I thought I was experiencing this "crazy demand." But boy, was I wrong.
This weekend, when I walked in the door to Veritas Vineyards, I nearly bowled over a group of people standing in the doorway. "Bad place to stand," I thought, until I saw that they were merely in a line that extended all the way to the door for a tasting. The place was packed. I had never seen Veritas even close to that crowded before, and assumed there must be an event going on. But, according to the staff, that was a "slow weekend these days."
At only $10 a tasting (for 7 wines), wine tasting at Veritas is a great deal. Several of their wines have won top awards recently. Personally, I found most of their wines both unique in taste (versus the rest of the US) and of even higher quality than I remembered. Their current winemaker, daughter of the original owners who moved here from England to open a passion project, recently started to much acclaim. And, the property is beautiful. But, these advantages extend to many of the wineries around Virginia. According to the staff at the property, the massive demand wasn't just a Veritas problem, "it's all of the wineries."
What Virginia may lack in Napa reputation, it makes up with views of the Blue Ridge Mountains and high quality, affordable, and exciting wines. There's also nothing quite like a Virginia Viognier. Don't disregard Virginia wine country - it's on the way up!
Part 1: The Mind-blowing Growth of the Virginia Wine Industry
Most (if not all) of you heard me gush over the Virginia wine industry for my mid-term presentation. In summary, in case you missed it, demand for Virginia wine is far outpacing supply. And the number of wineries and vineyards is exploding. When I graduated from UVA 3 years ago, I thought I was experiencing this "crazy demand." But boy, was I wrong.
This weekend, when I walked in the door to Veritas Vineyards, I nearly bowled over a group of people standing in the doorway. "Bad place to stand," I thought, until I saw that they were merely in a line that extended all the way to the door for a tasting. The place was packed. I had never seen Veritas even close to that crowded before, and assumed there must be an event going on. But, according to the staff, that was a "slow weekend these days."
At only $10 a tasting (for 7 wines), wine tasting at Veritas is a great deal. Several of their wines have won top awards recently. Personally, I found most of their wines both unique in taste (versus the rest of the US) and of even higher quality than I remembered. Their current winemaker, daughter of the original owners who moved here from England to open a passion project, recently started to much acclaim. And, the property is beautiful. But, these advantages extend to many of the wineries around Virginia. According to the staff at the property, the massive demand wasn't just a Veritas problem, "it's all of the wineries."
What Virginia may lack in Napa reputation, it makes up with views of the Blue Ridge Mountains and high quality, affordable, and exciting wines. There's also nothing quite like a Virginia Viognier. Don't disregard Virginia wine country - it's on the way up!
Decoding How We Order Wine
One of my closest friends has worked in the food and wine industry since high school. She has seen all ranges across the “fancy” spectrum and has spent a lot of time learning the translations that she needs for understanding what people are actually asking for when they order wine. I asked her for a brief overview of how people order.
People most commonly order varietals or ask for something based on a region they like. The follow-up questions then has to be whatever they haven’t already answered – she said, “you have to ask follow-up questions to figure out what KIND of Bordeaux they usually drink since its frequently a blend or WHERE their favorite [sauvignon blanc] is from because one from Marlborough will be zesty and green versus an Italian one I'm working with right now is actually quite round and has a little bit of oak on it.”
The most common question she gets asked is if a wine is dry or not – “which for someone in wine,” she said, “is always a funny question because almost ALL wine is dry, with the exception of dessert wines that will typically be in a separate section of the menu.” Usually, people are trying to ask if a wine is fruity, but that can be hard because they can like a wine that is fruity if it is also well balanced. Ultimately, “it takes a lot of work and basically just knowing your list and how your wines measure up to others on the market.”
A final piece advice she gave is, “especially in high end restaurants where the staff really know their stuff, [it’s a mistake] to not give a price range up front when you ask for a suggestion. I really wont judge if your price range is under $100 or under $50 or whatever, I'm gonna help you find something great, but it's super helpful to have that jumping off point.
French attitudes toward wine
I came across an interesting article this morning detailing a bit of a backlash against health authorities in France.
https://www.washingtonpost.com/world/europe/in-france-is-wine-still-a-national-treasure-or-is-it-a-health-risk/2018/03/05/729dfd74-2082-11e8-946c-9420060cb7bd_story.html?utm_term=.95afa26d4f97
Critics of the large amount of wine consumption in France are calling for more restrictions around wine and alcohol in general. According to the WHO, "French people over the age of 15 consume 3.2 gallons of “pure alcohol” per capita each year on average". These critics cite alcohol as the source of domestic violence, suicide, and accidental death, and are calling for health organizations to stop recommending alcohol "in moderation" and instead plainly state that alcohol (including wine) is just bad for your health.
Macron, standing strong with the wine industry, insists that wine is perfectly fine and that he has wine with lunch and dinner every day. Interestingly, he says that there may be health effects from drinking spirits or beer, but not with wine. This is particularly curious, since wine has higher alcohol content than beer.
I found it interesting to see this health movement in a country that holds wine so closely to it's national identity. It will be interesting to see how calls for public health interplay with the economics of the French wine industry and national identity in France.
https://www.washingtonpost.com/world/europe/in-france-is-wine-still-a-national-treasure-or-is-it-a-health-risk/2018/03/05/729dfd74-2082-11e8-946c-9420060cb7bd_story.html?utm_term=.95afa26d4f97
Critics of the large amount of wine consumption in France are calling for more restrictions around wine and alcohol in general. According to the WHO, "French people over the age of 15 consume 3.2 gallons of “pure alcohol” per capita each year on average". These critics cite alcohol as the source of domestic violence, suicide, and accidental death, and are calling for health organizations to stop recommending alcohol "in moderation" and instead plainly state that alcohol (including wine) is just bad for your health.
Macron, standing strong with the wine industry, insists that wine is perfectly fine and that he has wine with lunch and dinner every day. Interestingly, he says that there may be health effects from drinking spirits or beer, but not with wine. This is particularly curious, since wine has higher alcohol content than beer.
I found it interesting to see this health movement in a country that holds wine so closely to it's national identity. It will be interesting to see how calls for public health interplay with the economics of the French wine industry and national identity in France.
Monday, March 5, 2018
How to Pour Wine
Have you ever been impressed by the wine service in a fancy restaurant, but not sure exactly what the sommelier is doing that made you felt "nice"? Have you ever wondered what's the best way to serve wine at the fancy dinner party that you are hosting? In this post I'd like to share a few tips on how to serve wine like a professional.
Setting: assume that you are hosting a fancy dinner party and your guest of honor brought a beautiful bottle of 2012 left-bank Bordeaux. You have a party of 6 with both men and women.
Preparation: ideally you would have a clean white towel folded and draped on your left arm (you are right-handed), and a corkscrew in your pocket. You can skip the towel - not a big deal at home. Wine glasses are already set on the table on the guests' right. 2 coasters on the table (one for the cork, another for the bottle - no big deal if don't have them).
Temperature: I generally don't like splitting hairs with serving temperature. I prefer 55-60 F for red wines and a tad colder (50-55 F) for whites. If you don't have a temperature controlled cellar, chill the red a little bit in the fridge (~30min) before serving.
Presentation: hold the body of the bottle in your left hand and the neck in your right hand, label facing the guests, and present the vintage, appellation, and winemaker to your guests. Key here is label facing guests.
Opening the bottle: cut the foil from under the lips (clean cut), wipe the top with your towel (to get rid of mold if any), remove the cork using your preferred method, then wipe the top again (to get rid of cork dust). Put the cork on a coaster on the table.
Test pour: this is your guest's bottle... so you can skip it if you want. Or you can pour a little bit in your own glass, smell it (key here: don't drink it), and say, "ah that's beautiful!" Don't test pour for any of your guests.
Pouring: start with your guest of honor, then the ladies, then the gentlemen, in a clockwise order. For a party larger than 8 or if space is limited, it's okay to just pour clockwise. Always pour from one's right side (if seating area permits). Pour for yourself in the last place. After each pour, wipe the top of the bottle with your towel.
Finish: put the bottle on a coaster on the table. Enjoy the lovely bottle with your lovely guests.
In a fancy restaurant, the wine service is almost like a ceremony and can get quite detailed. However, the key components are roughly the same as outlined above (except that the sommelier will present to and test pour for you). Next time you order a bottle of wine at a nice restaurant, you'd notice those details that the sommelier performs for you!
Setting: assume that you are hosting a fancy dinner party and your guest of honor brought a beautiful bottle of 2012 left-bank Bordeaux. You have a party of 6 with both men and women.
Preparation: ideally you would have a clean white towel folded and draped on your left arm (you are right-handed), and a corkscrew in your pocket. You can skip the towel - not a big deal at home. Wine glasses are already set on the table on the guests' right. 2 coasters on the table (one for the cork, another for the bottle - no big deal if don't have them).
Temperature: I generally don't like splitting hairs with serving temperature. I prefer 55-60 F for red wines and a tad colder (50-55 F) for whites. If you don't have a temperature controlled cellar, chill the red a little bit in the fridge (~30min) before serving.
Presentation: hold the body of the bottle in your left hand and the neck in your right hand, label facing the guests, and present the vintage, appellation, and winemaker to your guests. Key here is label facing guests.
Opening the bottle: cut the foil from under the lips (clean cut), wipe the top with your towel (to get rid of mold if any), remove the cork using your preferred method, then wipe the top again (to get rid of cork dust). Put the cork on a coaster on the table.
Test pour: this is your guest's bottle... so you can skip it if you want. Or you can pour a little bit in your own glass, smell it (key here: don't drink it), and say, "ah that's beautiful!" Don't test pour for any of your guests.
Pouring: start with your guest of honor, then the ladies, then the gentlemen, in a clockwise order. For a party larger than 8 or if space is limited, it's okay to just pour clockwise. Always pour from one's right side (if seating area permits). Pour for yourself in the last place. After each pour, wipe the top of the bottle with your towel.
Finish: put the bottle on a coaster on the table. Enjoy the lovely bottle with your lovely guests.
In a fancy restaurant, the wine service is almost like a ceremony and can get quite detailed. However, the key components are roughly the same as outlined above (except that the sommelier will present to and test pour for you). Next time you order a bottle of wine at a nice restaurant, you'd notice those details that the sommelier performs for you!
Sunday, March 4, 2018
Biondivino in Town & Country
My parents were here this weekend so early last week I went to Biondivino in Town & Country right near the Cheesehouse to spruce up my beautiful Schwab residence with a few bottles of wine.
The associate helping me immediately asked if I had been in a Biondivino before as the main store is in SF, and when I said no, she went into a long description of why I was no longer in a typical wine store. As the website states, "our shop is more like a 'living wine list'. Commercialism and scores don't matter here – instead we focus on quality and history. We cover Italy top to bottom and hand select our portfolio of wines from smaller producers, featuring many organic and biodynamic wines as well as the harder to find cult wines."
Maybe I am just a sucker for a good differentiation pitch, but it really did feel like a different experience. The store itself is very minimalistic compared to the usual wine stores that feel almost like they are owned by a hoarder at times. I am admittedly a novice when it comes to wine, but loved the focus on Italy and on organic/biodynamic wines. In a lot of ways, the narrow scope made the entire experience a lot less overwhelming. My choices were fewer, and on a sleepy Thursday afternoon in Palo Alto, I felt no sense of rush or stress by the sales associate. I highly recommend it to all!
Picture of store front:
The associate helping me immediately asked if I had been in a Biondivino before as the main store is in SF, and when I said no, she went into a long description of why I was no longer in a typical wine store. As the website states, "our shop is more like a 'living wine list'. Commercialism and scores don't matter here – instead we focus on quality and history. We cover Italy top to bottom and hand select our portfolio of wines from smaller producers, featuring many organic and biodynamic wines as well as the harder to find cult wines."
Maybe I am just a sucker for a good differentiation pitch, but it really did feel like a different experience. The store itself is very minimalistic compared to the usual wine stores that feel almost like they are owned by a hoarder at times. I am admittedly a novice when it comes to wine, but loved the focus on Italy and on organic/biodynamic wines. In a lot of ways, the narrow scope made the entire experience a lot less overwhelming. My choices were fewer, and on a sleepy Thursday afternoon in Palo Alto, I felt no sense of rush or stress by the sales associate. I highly recommend it to all!
Picture of store front:
Saturday, March 3, 2018
Wine as an investment
In this week's class, Carol mentioned that most people drink wine almost too soon now, and fewer people are collecting wine for investment purposes. There are many reasons for this, aside from people's shrinking attention-span. Cellars can be expensive to own and maintain, and for beginners, it is difficult to tell which wines are truly investment worthy.
Nevertheless, for people interested in investing in wine but do not want to physically store the wine themselves, I found that there are wine investment funds that are dedicated to buying wines with growth potential, and there are stock exchanges for wine (such as Liv-ex).
Here is the wine portfolio of the (UK) Wine Investment Fund, all their wines are stored in government bonded warehouses to avoid VAT.
There are many reasons fine wine can be a good investment. The good investment-grade wine provides good risk-adjusted returns, and serve well as a portfolio diversifier. According to Liv-ex, fine wine investment has seen consistent annual return of about 12.9% since 1988. Wine investments can also be used as an inflation or currency hedge. Wine investment has existed for hundreds of years, and it is not going away. I am wondering if there are potential business opportunities to do crowd-funded wine investment, offering investors the options to "drink or sell" in a couple years.
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