The art and science of high stakes

I tend to focus on the technical aspects of wine, but some recent winery visits and conversations with winemakers have gotten me wondering about the science and art of commercialization.  Commerce and marketing are always integral to winemaking, as sales allow for investment, and often the business end directs the technical decisions in the winery.

In Spain, this integration of affairs and production is particularly pronounced given the current economic situation. Diego Fernández Pons, winemaker at Bodegas Enguera in the D.O. Valencia compares money to energy – the source of nourishment for a business, which, these days, requires particular ingenuity and effort to acquire. Wine consumption amongst the Spanish, as in all of the Old World wine nations, is on the decline. According to Pedro Iglesias, also a winemaker at Enguera, the consumption of around 17 liters per habitant per year is not enough to be able to build up the local market first.  It is true that in general, products of “terroir”, which valorize their sense of place, typically earn that value first in their home community, a value that can then be applied in the export market.  There are, of course, other, ecological benefits to selling locally, reducing the transport footprint of the wines, though this is a complex topic in wine, where outside of their place of production, much of their worth and renown is based on the fact that they were produced in an often highly glorified wine region.

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(Vineyard in D.O. Valencia)

So instead of selling locally, Enguera is exporting 90% of their wines, and apparently this is a common theme amongst Spanish wineries.  Since the beginning of the crisis, winemakers and marketers have packed up their bags to go traveling around the world in search of new export markets (keep in mind that Spain has the largest surface area of vineyards of any country in the world, and is the third largest producer by volume of wine – that makes for a lot of wine to get rid of if people aren’t buying it within the country).

Clearly then, the business side of things is important, crucial even, to the success of a winery.  But what is the best way to approach it?  Like much else in wine, it seems like the best approach is a sprinkling of art, solidified with a bit of science.

The ART of trend prediction.

Wine is not a product that is sold immediately.  At a bare minimum, production (of the final product… the production of the raw material starts much earlier) starts about 2 months before a wine could possibly be sold.  And these are the youngest wines, meant to be drunk immediately off of store shelves.  But often, a winery will work on a wine, in fermentation tanks, barrels and bottles, for several years before releasing it.  This means that during the year that the grapes are harvested and the majority of the pivotal decisions are made, the winemaker must be thinking ahead.  He must predict what people will be buying in 3, 5, even 7 or 8 years, to assure that he and his product will be relevant when that wine hits stores.

And this prediction must be blended with the answer to what, according to Diego, is the most important marketing questions there is : Does the world need my wine?

Winemakers must be able to make a wine that has some importance.  Something different. Maybe it expresses a beautiful classic terroir, but even that is questionable.  How many Barbarescos can the market support? It has to either have quality or value, but it also should have something more.  A story behind it. This is up to the creativity of the winemaker, as well as the marketing team (if they’re not one-and-the-same, which they often are).

One tool that many larger wineries employ is to create different products, and even different brands, to appeal to different markets. This diversification can help a winery respond to the two above challenges – of trend production and making itself relevant.  But in classical producer countries, especially in France, this can be a tricky issue since a lot of producers want to remain true to their terroir, and thus only produce the best of what their particular combination of variety, soil, microclimate and geography will give them.  But there’s some breathing room, I think, while still respecting terroir.  There will certainly be some diversity in the winery – different tanks vinified from grapes from different plots, different fractions of the press (juice/wine quality varies with the pressure exerted on the grapes during pressing), different varieties, etc., which all give options for blending at the end.  And instead of putting everything together to make one medium-quality wine, producers have various options to create different products appealing to different tastes and at different price points.

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(The diversification of wine brands : labels produced by Bodegas Enguera)

And then there’s the science

The technical aspects that can be tinkered with to meet business goals and constraints.  This could take on many different forms, but I’ll just look at a couple of examples : mechanical harvesters, selected yeast, and wood chips.

Modern mechanical harvesting machines are increasingly selective in what they bring back to the winery and what they leave behind, with the capacity to separate healthy, ripe grapes from stems, leaves, rotten grapes, unripe grapes and other debris.  The Enguera winemakers assert that they can be at least as efficient in collecting a clean harvest than a team of manual workers, especially if the pickers are untrained or unmotivated (I can attest to this – I have hand-harvested my share of grapes and it is true that after a few hot, sticky hours, it can be very difficult to remain diligent). And it is a huge money and time saver (if the size of the winery and vineyards permits).

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 (mechanical harvester in action)

Selected yeast can be either purchased from commercial suppliers or can even be cultured from a winery’s native yeast population.  The debate is still simmering on this issue, but it is generally accepted that selected yeasts are a more sure bet, as the winemaker can have a good idea of the conditions needed for fermentation, and most importantly the types of aromas that will be generated.

Wood chips put into the tank during or after fermentation are becoming a widely adopted practice, especially in large-scale wineries, and especially in the new world (they are often not permitted in European appellations).  But these products are a much cheaper alternative to putting wine in a barrel, and for certain quality levels of wines, can be a logical, economical replacement.

But the bottom line for such ‘nontraditional’ methodologies was quite nicely summed up by Diego. These can be useful tools, but only in the case where your consumer doesn’t care that you are using them.  I think this is a useful distinction to make, because the quality level or price point dividing wines that should or shouldn’t use oak chips is tricky to determine.  Diego’s philosophy is to be very up front about any technologies that he uses, so he would only recommend using them on wines where he knows that the customer would have no problem with it.  It is often a question of risk-reduction, and can thus be very beneficial, if it is in line with that all-important “story” of the wine.  If the wine is being marketed as completely natural, clearly the amount of inputs and manipulations must be kept to an absolute minimum.

So the success of a wine business is just a careful balance of art and science?

If only it were so simple

There’s also a fight.  The current examples of excellence are in Europe, but this is an issue all over the world.  Alcohol has risks.  Governments don’t tend to like risks.

In Spain, alcohol legislation is becoming stricter, adding to the list of difficulties faced by wine producers.  In France, it is the same story.  Anti-alcohol measures have been making headlines in France this week, the country often seen as the motherland of wine.

The current 4-part uproar concerns the potential extension of the law “Evin”, which strictly limits advertising of alcoholic products in France, to the internet and social networks.  There is also confusion between what is considered advertising and what is considered journalism, putting even critics’ columns at risk.  Additionally, the government is considering an increase in the tax levied on this product, which is the 2nd biggest export activity in the country.  And finally, they want to change the wording of the warning labels put on alcoholic products and advertisements for them. Currently it states that the abuse of alcohol is dangerous to health, but the new wording would simply read “Alcohol is dangerous to health”, thus eliminating any question of drinking with moderation (which, in the case of wine, is often suggested to be beneficial to health).

France’s response?  Just look at the words of the president and vice-president of the Interprofessional council of the wines of Bordeaux, Bernard Farges and Allan Sichel, who proclaimed, “we cannot accept to be considered dealers.” (sudouest.fr)

So the stakes are high, and the obstacles higher.  But somehow, with the perfect blend of creativity and technology, winemakers must create their perfect audience, and cater to them.

Where to shop for wine once you win the lotto

An inside look into one of Bordeaux’s most important and innovative negociants.  Millésima has been selling ultra-premium Bordeaux wines direct to consumers since 1983.  They are known for their luxe line-up and services, with personalized consultation to go along with the 8,000 wines offered in their collection (online at millesima.com and still in paper catalog format, which they continue to snail-mail to loyal customers in order to keep a multi-touch, multi-channel approach).  The wines are all sold by the case, ranging in price from 86€ (a 12 bottle case of 2010 Côtes du Rhône) to 12,500€ (case of 6 bottles of 2000 Château Lafite-Rothschild).  The majority of the prices are in the triple digits, though with many in the quadruple digits (we can all breathe a sigh of relieve that the Lafite-Rothschild is one of very few to reach the quintuple-digits!).

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Their warehouse has over 2,500,000 bottles in stock, in the best conditions, all in their original boxes from the Chateaux (key to maintaining their original value, as in this industry the removal of a bottle from its box immediately diminishes its value)

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