Wine: Doomed?

Mike Dunne, the long-time wine writer for the Sacramento Bee, has written an outstanding, if a bit schizophrenic, article (Reg. Required) on the dichotomies that exist between the large wine brands and companies that appear to be taking over the industry and the small, artisan winemakers who are proliferating today in the industry. The article has so many interesting points and characters in it I just have to comment on a number of thoughts it provides.

Discussing the practice of one winery controlling, owning and marketing an number of brands, such as Gallo and Constellation, Dunn writes: "Gallo, for example, sold an estimated 75 million cases of wine in 2003, more than any other corporation, according to tracking by the trade magazine Wine Business Monthly. Constellation sold 66 million cases, Bronco 10 million."

Dunn Then asks the following questions:

"Is the industry heading toward monopolization by a few massive players?"

The answer is that the industry as a whole is not heading toward monopolization. However, the big players have monopolized the shelf space at grocery stores, convenience stores, drug stores and most other retail outlets where commoditiztion and low pricing is the focus. Even at progressive.quality-oriented grocery stores you see BIG corporate wineries ruling upwards of 40% of the shelf space with their various brands. This IS a bad thing IF you believe the wine is a special product capable of inspiring us with its reflection of the diversity of people and places. 

"Will the desire for profits prompt corporations to expand production of more popular wines such as chardonnay and merlot while cutting back or even eliminating styles currently out of vogue, such as chenin blanc and semillon?

Clearly the answer to this question is "YES". However, it is possible for a large corporate winery to choose to capture and popularize the "Chenin Blanc" market. This in turns opens the doors for artisan producers to produce quality examples of the varietal for an audience of consumers that did not exist prior to the big boy building the market for  what would be a formerly moribund varietal. 

Will CEOs who acquire a winery with a revered and limited wine be able to resist the temptation to enlarge production and compromise quality?


Is the modern California wine trade, built as much on visage as palate, at risk of losing personality and identity, or at least a key marketing tool, as corporate suits succeed the little ol’ winemaker?

Dunne is  really asking, "will the modern, marketing-driven wine industry shut out  the artisan winemaker and their access to the consumer?"
No. At the risk of tossing around a cliche, wine is indeed an art..or can be. And there will always be artists willing to take up the brush. 

From these questions, Dunne jumps to the question that hard core wine lovers think about, writing: "When it comes to the potential corporate impact on wine styles, however, industry insiders and observers are more nervous. They fret that popularly priced wines – $10 and less – where the giants of the industry are competing most fiercely, are being reduced to one of a kind, with little variation in flavor and structure from one brand to another.

This is essentially the contention set down in the movie "Mondovino" that argued corporate winemaking was ripping the soul from wine. There is no soul ripping going on. However, it is true that finding a uniquely flavored, complex wine at $8 is something of a chore. But let’s remember, few people buying $8 wines really want to take up that chore. They want an $8 bottle of wine that has fruit flavor and alcohol in it. 

But then there are those who argue that blandness has entered the high-end, artisan area of the market. Dunne quotes one of America’s greatest wine writers, Bob Thompson, who retired from writing about 8 years ago or so. Bob argues, 

"My overall sense is that marketing has taken over, and as a result you get all this machine-tooled stuff meant to get a high score from one of two sources, and nothing else matters. There’s not as much character in wines today. There’s still some individuality in a handful of wines, but overall there’s less of it."

Again, this is an opinion best expressed recently by Jonathon Nossiter in "Mondovino". There is a consistency of style at the high end today, particularly among Cabernets from Napa, Shiraz from Australia, from Bordeaux garagistes and even among many New World Pinot Producers. However, Thompson and others aren’t taking into account the impressive increase in small artisan producers that has occurred of late and the really unique wines they have brought to market. 

Dunne gets to this points:
"Almost to a person, however, they(industry types) are encouraged by another thread running through the industry. While the growing visibility and power of the nation’s largest wine companies are generating most of today’s wine-news headlines, a significant though largely unrecognized parallel development is under way – the proliferation of small, family-owned wineries."

Dunne underlines his analysis by getting a quote from one of California’s most savvy wine industry analysts, Vic Motto: "The number of small wineries is exploding. It’s more than doubled the past 10 years. Over the past four years, despite the state’s slow economy, the number of wineries has grown 24 percent, and that growth has been driven by small wineries."

Dunne let’s Randal Grahm, owner of Bonny Doon Vineyards (and other labels) sum up the point: "There is a dichotomy between artisanal winemaking and corporate winemaking. One is calculated, profit-driven and largely a marketing exercise. One is an expression of a personal aesthetic. Megabrands live in their own world. Small artisanal brands live in a totally different universe, and we don’t communicate at all. They have the money, we have the soil."

Dunne finishes up with his own comment:
"In looking at the names on wine shelves and wine lists, it’s just difficult to tell who is who sometimes."

This final statement from Dunne is certainly true. And it is where wine journalist (and dare I say bloggers) come in. It strikes me that if you are going to write about wine, in any form, the best service you can provide is to point consumers to those wines they may not come across on the grocery store shelf; wines that might take a little searching. This is how writers can help assure that corporate, same-tasting wines don’t overtake the industry and the shelves. 

Posted In: Wine Business


5 Responses

  1. Jathan - May 25, 2005

    Nice write up Tom.
    A few points though. Consolidation is a fact of life in every industry. There will always be those willing to start up a winery and then sell out. The question is, when these small family owned operations are sold, does the quality or focus of the wine and winery change?
    “Over the past four years, despite the state’s slow economy, the number of wineries has grown 24 percent, and that growth has been driven by small wineries.”
    So, what does this statement mean? Most of the new wineries are fueled by the wealthy that find it exciting to have there own winery. Of course they want to produce a quality product, so they hire an expensive vineyard manager, get the best oak barrels, and use the same winemaking technics as large wineries to produce a bottle they can put a $100 label on and sell to a restricted mailing list. How is that different than what the large corporations do?
    That’s not to say all small producers are like this. Wineries I have found such as Linne Calodo and Neal Family Vineyards pride themselves on the wines they produce, and make expressive bottles that are different than the norm.
    As far as the last statement
    “In looking at the names on wine shelves and wine lists, it’s just difficult to tell who is who sometimes.”
    I couldn’t agree more. The more research I have done, the more and more wineries I see falling under the umbrella of a huge conglomerate, wineries that I thought were small family owned boutique wineries.
    Should that dissuade us from buying from these products? I don’t think so, I think it is our job to give quality recommendations for wines we enjoy, regardless of the producer.
    I believe the best way to branch out from similar tasting wines, is to focus on terrior. I think that’s where you get the biggest differences in same varietal wines. Instead of that New Zealand Sauvignon Blanc, reach for one from the Loire, etc. Most people are cyclical wine buyers. Time to branch out.

  2. Mike - May 25, 2005

    Its clearly a trend for the large to swallow the small; and I don’t see how you stop or limit this type of activity or even if its a bad thing. The big boys have the cash necessary to take the product into new markets. Look what this has done for Australia. Those cheap, consistent (perhaps not always the best quality) wines have made some Aussie wines household names in many contries. That has made it easier for the specialist shops to get artisan wines and sell them to the wine savvy end of the market.
    Corporate buy-ups have been happening in Australia for some time now, and yet new wine areas and new wineries seem to spring up all the time. Perhaps in some cases its being done so that the little guy can sell his holding out to the big corporation and make a fast buck. But a place like the Barossa Valley has a number of 3rd, 4th and 5th generation wine families who hold on and continue to make excellent wines. Taking a single example is never good, but Kalleske have only recenly put the family name on wine from grapes they have grown for decades; they were just grapegrowers. Now with just a few vintages under his belt Troy Kalleske is knocking at the door of international fame. His just released 2003 Johann Georg Shiraz should set a fire under all Shiraz lovers – if they can get a bottle!
    For Aussie Shiraz not all the top end wines taste the same. To me it seems that the consistency seems to be in the $15-25USD range. Below that there is quite a bit of variability with some real rubbish among some bargains. Above $25 you can also get variety in quality but also outstanding wines. And I would venture that the same is true for wines here in the USA, although I don’t drink all that many of them.
    As for Mondovino. I know you have your opinion on this, but after having seen it I’m not sure I got any sort of a strong message from it. Perhaps a better production might be able to do the message more justice.
    One thing that I think you have hit on is that we wine bloggers should make more noise about where folks can get their hands on quality wines at reasonable prices. Certainly supermarket store shelves are not really the place to be looking for art when it comes to wine.

  3. huge - May 25, 2005

    Tom, I had just finished reading the article before swinging by here. I thought it was a nice synopsis, but could have touched on distributor consolidation and how many brands are facing limited options in getting their products to consumers. For example, Lauber in NY/NJ was recently bought by Southern and has forced a lot of small wineries into the Southern family, kicking and screaming.
    Its also interesting to note that a few years ago, Bud tried to launch a “stealth” microbrew (higher price and more hops) and it failed. Why is it that Gallo can very successfully launch Rancho Zabaco when Bud can’t do the equivalent? My guess is that beer consumers have two things going for them: 1) fewer overall choices and 2) they are generally better informed (which is a function of 1).
    Good comments on the article.

  4. Tish - May 25, 2005

    Very interesting stuff. One point I’d add is that despite significant consolidation at both the producer and wholesale level, somehow I still think the “boutique” producer stands a better chance of getting attention today than 20 years ago. And let’s not underestimate the ability of American wine lovers to appreciate the idea that “small is beautiful” AND the truth that big companies can often think like a small winery when it comes to producing special wines.

  5. tom - May 25, 2005

    Your comment about 20 years ago is intersting. 15 years ago, when I was working with Matanzas Creek, I could count their quality competitors on one hand for both Merlot and Chardonnay. Well, maybe 2 hands for chardonnay. It was much easier to gain attention or a high quality producer back then for the obvious reason.
    You are right about the big companies. They can think and act like small quality producers. I think it comes down to who they have running the place and the kind of autonomy they are given.

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