Would You Mind Explaining to Me ...
A few things I confess I still don't understand
Matt Kramer
Posted: January 18, 2011
Wine pundits are supposed to be sages. We fancy that everyone looks to us to have all answers to all questions. I hate to be the one to disappoint you, but we pundits are often as puzzled by events as you might be.
Let me give you some examples of matters that, frankly, I don't feel that I fully grasp. I don't mind saying that I'm hoping that one of you can help me better understand these puzzlers. For example:
What the hell happened to Australian wine? Why has it gone into such a nosedive in American esteem?
Am I the only one who was boggled by Constellation's recent sale of its Australian holdings for a shocking fraction of what it originally paid just eight years ago?
In 2003, Constellation paid $1.1 billion for the giant Australian winery BRL Hardy. Last month it announced that it was selling BRL Hardy for $290 million.
Let me get this straight: In just eight years, one of the supposedly savviest wine business companies on the planet somehow managed to lose $810 million in asset value. "This is a tremendous addition to Constellation's portfolio," said company CEO Richard Sands in 2003 in announcing the purchase. Now, this same deal has become a tremendous subtraction to the Constellation portfolio.
How could this have happened? Did I not "get the memo"? It was only a few years ago that Australian wine was every wine buyer's darling. Wholesalers and retailers reported that they couldn't ship the stuff fast enough, so strong was the demand.
Australia's so-called "critter wines" were hopping from shelf to shelf, seemingly from one success to the next. Everyone raved about the quality-to-price ratio. Everyone marveled at the marketing genius of the Australians. Everyone was talking about how Australia would rule the world's wine shelves.
According to a recent Wine Spectator report, "Constellation built a huge debt, which has been exacerbated by the bad economy." The report further noted that the company was harassed by "a strong Australian dollar, high grape costs, duty increases and retailer consolidation."
Maybe I'm missing something, but this still doesn't explain why Australian wine has tanked so badly. I mean, what's really changed? Has the American palate transformed so radically in the past five years that the Aussie wines that were once so loved for their smooth textures, juicy fruitiness, lighthearted packaging and you-can't-beat-it pricing are no longer viable in the American market?
To listen to wine merchants, Australian wines are a drag on the market. The cheap ones continue to sell (although apparently not as effortlessly or with their former skyrocketing sales trajectory). Expensive Australian wines reportedly don't sell at all.
Now, I have my own theory as to why Australian wines stumbled so badly in the market. That theory, in a nutshell, is that the Aussies failed to celebrate and service their high-end artisanal producers as aggressively and as enthusiastically—even lovingly—as they did the low end. Australian wine lost cachet—or rather, never acquired it.
Yet even that doesn't explain how a big corporation managed to lose $810 million in eight years. Australian wines are as good today as they were a decade ago. The values are as good today as they were then.
So I ask you: What really happened that took the glow off the Australian wine comet? Because frankly, I still don’t get it.
Why can't Bordeaux save itself?
This is the inverse of the Australian story. Here you have the high end, the most famous and expensive wines, selling at ever-higher prices, indeed, the highest in Bordeaux's centuries-old history.
Yet once you get past the privileged few—a mere hundred or so great properties—Bordeaux is reeling. Bordeaux's thousands of nonprivileged vineyard owners are staggering from debt, unsure where to sell their unwanted wines or even quite how to market their majestic history. In the mid-2000s, prices of everyday Bordeaux wines plunged by half in just three years—and they haven't recovered.
Don't look to China to save Bordeaux. The Chinese only want the most famous wines. Or at least those with a strong brand. They're not interested in Bordeaux's everyday wines. The Chinese are not the salvation.
The American market offers no salvation either. Recently, I had a conversation with a young woman who had to bone up on Bordeaux for some kind of wine exam. I told her that once past this written test, she really didn't have to worry about Bordeaux for the rest of her life, even though she is only in her twenties.
Puzzled, she asked why. I said, "Think of all your friends who love wine. How many of them ever mention Bordeaux?" She thought for a moment, then declared, "You're right! No one ever mentions Bordeaux. No one I know drinks it or even thinks about it."
Bordeaux is neither a reference point nor a personal wine reality for young American wine drinkers. The famous red Bordeaux are beyond their reach. They're not real. Inexpensive red Bordeaux are viewed as uninteresting or worse, lacking either the newness or the narrative of so many wines from Spain, Italy, California, Oregon, Portugal, New Zealand, Argentina or Chile.
How did this happen? How did France, long the world's greatest wine marketer, manage to lose its grip on a world that, really, had no desire to let go of the romance and reassurance of something as famous as red Bordeaux?
Certainly we can identify some very basic causes, not the least of which has been the failure to reliably improve quality. It's hardly a secret that nobody believes French marketing blather more than the French themselves. Put bluntly, they hadn't a clue about how the world was changing around them. Everyone else's wines were getting better, being packaged and sold better, and talked about better.
By way of explanation, the usual suspects are trotted out: that Bordeaux is unwieldy, with more than 20,000 producers; that these small growers don't know how to market; that the world has changed and there's more competition. All of these statements are true. Yet none explains—in my opinion, anyway—how and why Bordeaux could have plummeted to such a precarious position.
Why hasn’t Syrah captured the American imagination?
I'm still puzzling over this one. California and Washington are today creating some truly remarkable Syrahs at every price point. For example, I recently guzzled down a 2009 Cycles Gladiator Syrah from California that was simply terrific for the money—and that was peanuts, just eight bucks a bottle. The list of truly great American Syrahs grows longer every vintage.
Yet apparently no one is panting after American Syrahs (those from the Rhône have a stronger following). I don't get it. There's no more reliable value—and no greater quality for the money today—than California and Washington Syrah. There are bottles available at every price level. The quality is in the glass. The supply is more than ample.
So what happened? Clearly, Syrah was swept aside by the rise of—and consumer fascination with—Pinot Noir. Bad timing. Still, does that really explain the second-class status of Syrah today? Can we really not hold two great red wines in our hearts at the same time (along, of course, with Cabernet)? Surely there's a better, more persuasive reason than "Syrah got clobbered by Pinot Noir."
I submit to you these wine perplexities. As I previously confessed, I'm not at all certain that I have an insightful grip on the answers. Maybe you do? I sure would like to know.
In my experience Bordeaux doesn't get really good until you are willing to slap down about $250. For that price you can buy two or three bottles of equally as good California, Spanish or Italian Cab/Merlot blends. Especially Italian. And Bordeax in the $50-100 price range is pretty generic. There is little personality within the 2000 producers you alluded to.
And I might even toss Burgundy in there as well. Separating the wheat from the chaff in Burgundy requires either a Master of Wines designation or a great deal of time and money, both of which are in short supply these days with the majority of the wine drinking public.