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Winemaker and GM

winemnaker and a bottle

A story came across on Wine Business today, that Burgess Cellars had promoted Kelly Woods from winemaker to General Manager (he’ll continue making the wine).

I realized that some people probably don’t understand why that’s a big deal.

So yes, there’s going to be some additonal oversight of staff involved, for most winemakers that’s not exactly an exciting part of the job.

But, there’s a second portion that is incredibly important.  We saw it during a harvest trip in Napa Valley last year, the amount of Rose was running low and a decision had to be made, if some additional grapes should be harvested from other parcels.

When the winemaker and the General Manager are different people, you’ll often get different responses in this situation.

Plus, I’ve seen quite a few times, where the continual stress of an ill fit between the business side of the business vs the artistic winemaking side of the business ends up meaning that the winemaker eventually leaves, for either more control, or somewhere where there’s a better fit.  In many ways, I think there’s a more natural progression for many wineries when the winemaker is the owner, or when the winemaker directly reports to the founders, instead of a 3rd party general manager.

In any case, call that a rant if you will, but I feel like winemaker as GM, is a nice setup for a winery. It seems that the artistic progression is often more seamless.

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The Ubiquitousness of Chardonnay

California White Wine Plantings 2015

I have a newsletter that I’m finishing up for my Explorations Wine Club customers, which is a Carneros Chardonnay.  I put together a graph for white wine plantings within California that I thought deserved a short mention on its own:

California White Wine Plantings 2015
California White Wine Plantings 2015


As you can see, there’s an awful lot of Chardonnay.

The interesting thing is that the conversation with many winemakers doesn’t center on Chardonnay.  It’s almost like Chardonnay is so ubiquitous that they don’t feel the need to even discuss it.

But, it’s almost half the white wine plantings in the state of California.

In Oregon, it doesn’t hold as much significance, but it’s growing more quickly than any other varietal.  In Washington?  Statistics aren’t quite as easy to come by, but it’s also a huge percentage of plantings.

I don’t have an easy answer for why.  But, the grape does grow well in a wide variety of climates and offers perhaps more winemaker choice in the production process than does any other.  Chardonnay made in new wood vs used wood vs stainless vs concrete eggs are basically different wines.  That’s why I would expect to have more conversation about Chardonnay than we do, after all shouldn’t it be interesting if winemakers have more choice and control?  Or is this like when we first opened Uncorked Ventures and conversations in Napa Valley seemed more centered around Syrah than Cabernet Sauvignon-is it always the newest thing that’s the most important?

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Wednesday Afternoon Thoughts

Pinot Gris Grapes

Over the past few weeks I’ve been thinking of the differences in the industry caused by a series of rules and regulations, many aimed at stopping organized crime close to 100 years ago and how they continue to make certain aspects of the industry untenable.

I mean, direct to consumer sales continues to skyrocket as wineries increasingly put themselves at the forefront of the 3 tier system, while distributors largely see their market share being eaten.  I think it’s a long term, great thing for the industry.  A wine club like my own only exists, if I can deliver wines that are better than your local store.  I do that by spending time in wine country. There’s always going to be retail stores, but they’re being pushed by wineries taking more direct sales and also by encroachment by grocery and other stores as well.

It’s a fascinating time to be the wine industry as we work to figure out how consumer preferences will change the entire nature and scope of what we do, likely for the next 50 years.

Now, if we could just get some common sense laws on the books to allow it all……that’s a tale for another day though.

Here’s some of the other wine industry stuff I’m debating:

  • Has the rise of Washington Cabernet Sauvignon cut into California market share at all?
  • Has the rise of Oregon Pinot Noir cut into California market share of late?
  • Where does California go from here if the answers to both above are yes? Rhone varietals?
  • The Other 46 is a real thing.  Who’s most likely to step out of that trap though? How?
  • Do vintners associations and marketing groups of wineries work?
  • How the hell is everyone selling so much Chardonnay?

Ok, so I won’t do too much of this, but there’s a lot going on.  A lot of moving parts in the industry.  I don’t want to swept up in it, as much as, making conscious choices given the constraints

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Monoculture in American Wine Regions

Bud Break

My favorite industry source, Wines and Vines had an interesting article on Napa Valley Cabernet Sauvignon prices. Napa Valley Cabernet Sauvignon owns the entirety of the valley these days.

They’re high.  Really. Really. Damn. High.

Much along the same lines, in Sonoma, Pinot Noir drives the bus.  

I can’t help but think, what happens in a wine region that has become something of a monoculture.  Quite frankly, it’s foolhardy for anyone with a vineyard in Napa Valley to grow anything other than Cabernet.

Given a standard Cabernet vineyard, you might make $7,000 per ton selling Cabernet. If you grew Merlot, you might get $2,000 of that these days.

Who in their right mind would grow Merlot or really, anything other than Cabernet in that scenario?

Really the only group who might be able to handle keeping other grapes in the vineyard, would be a winery with an estate vineyard.  At times your estate wine program grows what they know damn well will be nothing other than blending grapes.  But, if your winemaker hits on their blends consistently and those tend to go for the highest prices and keep the most consistent style year to year, it behooves you to make very sure that there’s enough of those blending grapes sitting around.

But, if you’re just a grower?

You graft vines over. You pull older ones out.  You get your vineyard over to Cabernet as quickly as you’re able to (after all, it still does cost you about $50,000 to get a single acre of vines online, grape growing isn’t a cheap endeavor).

What happens to regions that become monocultures?

Frankly, we don’t know. In the wine industry, we tend to look at old world wine regions to see how they do things.  In Bordeaux and really the rest of France, there are strict laws governing what grapes are in the ground. Bordeaux is known for blends and most vineyards have at least 3 of the 5 main varietals planted in the vineyard.  In Italy, it’s much the same, with the added focus on keeping a wider array of varietals because Sangiovese and Barbera take a long time to mature, while Dolcetto matures immediately. In Spain, Portugal and Germany there are blends and ying and yang wine grapes, some that need time, others that can be released immediately.

If you ask me to guess? I think vintners in Napa Valley and their counterparts in western Sonoma county will be concerned over both the long and the short term.  There’s been plenty of recent examples of regions where a specific varietal got decimated during a specific event.  As an example, Walla Walla lost a complete crop of fruit because of hail very late in a warm spring.

Not all grapes have bud break at the same time. Cabernet has bud break later.  That’s generally a damn good thing, you don’t lose an entire vintage like Walla Walla did.

But, it also ripens later.  If it has bud break a week or two later, it might ripen 6 weeks later.

In Napa Valley, hanging on the vine is a good thing.  But, October brings something that can kill off both the amount of fruit, as well as, the quality. Rain. In some years, it’s pretty nice to have some over ripened Merlot to add to your under ripened Cabernet Sauvignon to get to your normal mix, right?

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Sonoma Square Tasting Rooms

Wine Glasses

One of the most contentious aspects of the wine trade, one that the general public is basically utterly unaware of overall, is the push and pull between local communities and wineries opening tasting rooms.

There’s a common process that happens.  At the beginning, many a quaint downtown has been happy to see the previously vacant storefronts filled with businesses.  After some time, people start showing up.  Wine tourism is very real and a strong driver of tourist visits in a number of areas.  I wrote about the Sierra Foothills and how wineries in the region are working to life towns that look in some ways, like they might cease to exist if folks aren’t careful.

For a while, the locals tend to be THRILLED.  I was in Walla Walla two summer’s ago and saw the next steps.  Those increased dollars and foot traffic bring in a ton of businesses that the locals have always wanted.  Good food, a hotel or two and even more dollars for the local economy.

Eventually though, competition starts to grate on people.  Sonoma Square is probably my family’s favorite place to spend a day in wine country.  It has all the trappings of a wine country destination.  Yes, there’s plenty to drink.  But, there’s good food, really good food.  The kids park is awesome and centrally located.  The Barracks and walkable museum shows where California became a country and my school aged son, loves this kind of stuff.  It’s a great place to spend a day.

However, as Sonoma News reports, at some point the prices that are driven by the increasing appetite of the wine industry for space can drive out other smaller local business.  I’ve seen part of this in Los Olivos and other spots, but there’s a very real concern that wine country destinations, need to continue providing stores like children’s toy stores, clothing stores with reasonable prices and the type of spots that we all shop on a monthly basis.  Those are exactly the type of spots that simply cannot compete with a winery selling $75 Pinot Noir.

So what’s a region to do? Quite clearly, all the steps before the last one are great for local taxpayers in terms of the type of community that they live in, but also for their local government and its tax base.  But, how do you control the death spiral of local business that can result?

I think there’s a very real onus on local officials to have clear strategies on growth and how winery tasting rooms are considered part of the fabric of a town and not the only thing that’s going to exist.  Some cities try to do it, like Los Olivos has, by limiting the number of local tasting rooms.  Others allow a set percentage of alcohol permits as part of local business licenses.

I don’t think there’s a right or wrong answer, other than to note that cities and wider municipalities, need to try.

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Some Basics on Land Prices & Their Effect on Wine Price

dollar signs and prices in the wine industry

Over on Wine Business, there’s a section for real estate for sale.  Pretty much you see two general categories, wineries and undeveloped land.

Some extra background, it costs approximately $50,000 per acre to bring an acre of wine grapes fully online and into production.  That’s one part planting cost and another couple parts of the simple fact that it does cost money to farm grapes and it takes 5 years for a grape vine to be ready to produce high end wine grapes.

Let’s take this listing, a 12 acre parcel just outside Placerville in the Sierra Foothills.  The Foothills is an interesting region on a few levels and I can see Placerville being a draw for someone who wants some small town, with access to snow in the winter and warm summer temperatures.

I’ll assume that on that 12 acre parcel, that you can plant about 10 acres.  Gives you some space for a home, driveway and some other goodies that you’d expect at a working winery, like a barn.

Let’s also assume that since those vines are young, that you’re getting about 4 tons of grapes per acre. That gives you about 40 tons of fruit per vintage. Assuming some high quality fruit, I’ll go on the high end and assume you could sell the fruit for $2,000 per ton.

In essence you have an initial investment of $875,000 for about $80,000 in yearly revenue.

I mean it’s up to you to consider how that seems to work, but I’m guessing for most, those numbers don’t make much sense.

Thus is the continued and often exasperating financials of the wine industry.

BTW though, those numbers do work much better if you’re winery produces $50 Syrah from those grapes and is able to consistently sell that wine with an employee or two.

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Why are Wine Glasses Made of Glass?

Wine Glasses

It’s something that struck me during the Super Bowl when my 1 year old was entertaining himself by leaving the living room and coming back, in an attempt to grab any of the glasses that were on the coffee table (some wine, some beer, some water and even a kids juice mixed in) I wondered, why are wine glasses made of glass? I mean, as a parent, this isn’t exactly the perfect setup is it?  Sure we need them to be out of reach at all times, but occasionally spills happen even outside of little hands and cleaning up a broken glass with little feet around, is never a fun task.

I thought that there were two likely reasons for wine’s long love affair with glass.  First, glass lasts forever and much of what we do today, we do because it’s what always has been done.  For millennia we’ve been able to make glass, so as a species we continue to do so.  Secondly, glass is inert so it doesn’t change the flavor of your wine, which is a good thing.

After having a look a bit deeper, first impressions can be good ones.  There’s really only one real reason why we drink wine from a glass.  It’s inert and yes, we’ve done so as a species for an awfully long time.

According to Wikipedia, the history of glass-making dates to somewhere between 3500 BCE and ancient Egypt in the years before. While the history of wine is much debated, there’s plenty of evidence to show that Armenia, Egypt and Greece could make decent arguments that they invented wine.  If you noticed, that’s around the same region of world, even if it isn’t exactly a day trip in antiquity.

As an aside, it seems that in ancient Greece, wine was consumed in what looks an awful lot like a bowl.  Khan Academy with some good info, as always here. I noted that this doesn’t sit, if you put it down when full (much like a beer in the Czech Republic and how it gets refilled, until you say otherwise, but I digress) but even many years BC, glass was already the standard. For me, that felt important to note.  I also do think, we’ve drunk wine out of glass for thousands of years, now glass is simply more easily accessible for average people everywhere.

As far as my second point, I do think there’s some interesting stuff being done with different, eco friendly, inert (or at least largely so) wood’s, but glass is truly inert.  There’s no time frame to losing smells etc.  Glass just “is”.  It’s a vessel to get the wine from the bottle to your mouth, sometimes what works simply works and we shouldn’t mess with it too much.

In any case, that’s a powerful combination isn’t it? Wine glasses are made from glass because glass continues to be the best material to drink from and also because we’re able to produce them cheaply and easily for every human on the planet and have been doing so for quite some time.

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Another Day, Another Wine Algorithm

Machine learning image in wine

I was greeted by news this morning that a Master Sommelier, thinks that algorithm’s are better at predicting which wines you’ll like than are people.

So first and foremost, I have absolutely ZERO issue with the rise of machine learning either in a wider cultural context, or in the wine industry specifically.

That being said, there is one aspect of wine algorithm’s that no one is talking about: at their core, an algorithm needs good inputs to be able to make any firm conclusions.

So many of the computer learning processes out there rely on tasting notes.  They combine place or origin and then a set of inputted tasting notes, to make some conclusions about how similar a bottle of wine happens to be.

Quite honestly, that’s not good enough or specific enough data, so the outputs are corrupted.

Others in our space are trying to fix the issue of inputs.  There’s a local startup taking wine into the laboratory and measuring every individual compound in wine, to compare people’s reactions when you remove generic tasting notes and actually use science.

The startup mentioned above, gives folks a one on one quiz with a Sommelier.  Interesting but again, what’s unique about the input?

To me, a more scientific approach seems like something that has a higher chance of success over the longer term. People often ask if I think my wine club will eventually lose business to this type of machine learning and it’s something I’ve considered.  We know a few things, as people drink more wine they tend to want to try new and different things.  Plus, people just like the computer algorithm’s above need inputs.  Is it possible to know if you like Graciano, or something similar if you’ve never tried it before? While there is going to be more pressure on online wine businesses like mine to deliver the unique and different, or to compete solely on price alone.

So the next time you see a wine club advertising that they give you a few simple questions and then tell you everything you’d ever need to know about your palate, ask yourself is that enough information? What’s unique the inputs?

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Wine Country, Good, Bad and Different

School Bus Image

I saw an article today in the Napa Valley Register, about Napa Valley schools needing to cut about 9% of their budget and it got me thinking about a few things.

First, the full disclosure, my wife is a high school counselor, so the K-12 education system in California isn’t new to me and I do have more than a passing interest in this stuff as a father of boys and generally, as a California resident.

Ok, so the level of outside investment into Napa Valley is huge right? How many folks buying houses in Napa, especially the upper valley made their money somewhere in Napa, or even the North Bay itself? The numbers I’m certain are pretty small.

Outside investment is a good thing right? The problem for a school district, which makes an inordinate amount of cash from kids actually showing up at school is that folks that have made their millions already, don’t have school aged kids any longer. In California, the price per day that the state pays a school district for a child to attend school works out to about $40. In Orange County in Southern California, a school district asks for $40 if your child misses school.

Anyway, so there’s less kids per capita in Napa Valley than there would be elsewhere given the wider demographics at play.

The good of course, is that housing, like much of California, is expensive and is getting more expensive. There’s plenty of unmet demand as well.

Another issue that comes up with the Napa Valley schools is that it is still a rural district. Having kids coming from such varied parts of the valley adds an entirely different challenge that is consistent across much of the country of course, but we all have that idyllic image of walking the kids to school right?  I mean, Napa might have more schools than it otherwise would want largely based on how rural it happens to be.  Plus, that land is worth a ton these days.

Anyway, there’s a lot to talk about in terms of how the wine industry effects local communities.  Los Olivos and others across the west coast have already grappled, or are beginning to, with the idea of limiting the number of tasting rooms in small, rural areas.

No one, as it currently stands is looking at how a vibrant economy that’s being created, effects schools because that economy is based on a combination of empty nest early retirees and tourists.

The dollars are nice, but they’re going into the general coffers and not into the school district necessarily.

Every economy has built in winners and losers.  It seems in Napa, the school district might be on the losing side of how things are playing out, which is certainly unusual.


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An AVA Complaint

An AVA complaint

For those whom aren’t familiar, AVA stands for American Viticultural Area.  The entire concept was conceived some time ago to help explain the types of wines being produced in different regions.  Interestingly, the very first AVA granted in the United States happened in 1980, in that great hotbed of wine……Missouri. The main idea is that the AVA should tell you a bit about the quality and type of wine in the bottle.

So here’s my complaint.  Too often right now, I’m running into wines marked as simply California and not something more specific because of the way the AVA system is handled.

When you see a wine marked as California, it often means the cheap vineyards in California’s Central Valley. It’s usually the cheapest wine being produced in the state.

Not always.

Take the Kinero Grenache I shipped last month.  Perhaps the best Grenache in the state of California, but the vineyard sits too far west to be contained within the Paso Robles AVA.

The winemaker, who owns the label, didn’t have any choice but to label the wine as California.

Cheap, not even close….but the AVA approval process can take up to a decade. Seriously. Government red tape when it comes to alcohol and wine specifically is very real.

Another great example.  The wine I made myself, Aselstine Family Cellars.  I originally thought of making a 100% Grenache Blanc since that’s my favorite white wine grape.

But the only real vineyard sources that I had available to me, were from different parts of the state and there was not enough grapes at either site to make enough of the wine.  One was located in the Russian River Valley and one was in Ballard Canyon in Santa Barbara.

Both sites are highly prized and the AVA’s often garner around $40 for a bottle of white wine.

Put the wine together though and what do you end up with…..a wine that simply says California and that people assume, is cheap.

Look, there isn’t an easy answer here. Far from it.  I don’t even have a suggestion, it’s not like stuff as complicated as this can be explained by a label, often limited to about 40 words, with 30 of these prescribed by the state of California.

But, the number of wineries using the natural wine label, since they can’t access the term organic is emblematic of a wider issue.  Labeling requirements are pretty straight forward, but too many wines are falling through the cracks.

How do we fix it? I have no clue, but unlike a lot of people, I see it as an issue.  It’s starting to change the very choices that winemakers make and that’s something that labeling and federal law requirements and how they effect marketing, should never do.

I do know a good place to start. When wine regions want to apply for new AVA’s, there should be a straight forward and articulated process.  Look, the regions and the folks running the viticulture associations know what works.  They know that soil specialists and geologists are among a wide swatch of about 10 categories that need to weigh in on any proposed AVA.  Outline it for people. Make sure people considering new AVA’s know the rules of the game before they start playing as an example.

Secondly, don’t make them wait for so long.  I understand that sometimes paperwork takes a while, especially when you’re talking about digging up sections of old seabed.  But, if those rules were put in place before hand, shouldn’t you be able to tell people an answer to their AVA questions in relatively short order?

Lastly, let’s add this to the long list of things to brainstorm since it definitely does effect how people learn about and ultimately, buy wine.