The “Idea of Quality” and “Terroir”

CroserAnyone, in or out of the wine industry, looking for a brilliant and spot on analysis of the direction the global wine industry is taking should read Legendary Australian winemaker Brian Croser’s comments over at Fine Wine Press. His "The Idea of Quality: Creating Sustainable Competitive Advantage" was, I believe first presented as a speech. Though I am not sure.

In it Croser explains how the "idea of quality" has been overtaken by the "idea of terroir" and how embracing this particular notion of quality is the best path towards increasing the quality perception of Australian wine. Yet, his comments apply equally to any New World wine region.

Embedded in his words is the inherent question of the value and meaning of terroir. Is it a marketing phrase? Is it primarily an idea that speaks to the objective environmental factors that influence the growing of the grapes? Is terroir something that primarily informs us of what a wine should taste like?

These are questions that spring out of Croser’s piece, but are not truly addressed. I hope he will take a stab at these issues. In the mean time, he has written a short piece that should not escape the eye or anyone watching the wine industry seriously.

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  1. Mike - November 28, 2005

    Tom
    To some extent this has been Croser’s mantra for a number of years. But even in this piece he does not really provide a do-able solution to Australia producing what he calls “fine” or “great” wine.
    His shallow approach to the issue is evidenced by the statement “The global opportunity for fine wine is immense. The fine wine market is difficult to access but it yields superior profits on a sustainable basis to the successful players.” I have serious doubts that the global market for fine wine is immense. Very, very few Americans spend more that $15 on a bottle of wine (as shown by Constellation Wines USA Project Genome data). About 1% of the Australian wine sold in the USA costs more than $15 and there are similar numbers in the UK (my last couple of blog posts have been on this.) I don’t know how much profit [yellow tail] makes on the million cases they now sell each month but I’ll bet its more than some winery producing 20,000 cases of wines that sells for $50USD a bottle (e.g. Two Hands).
    And the bigger concern is the statement “The US in particular is currently rejecting Australian fine wine. At price points above $7.50/litre FOB (US$ 4.20/bottle, probable retail of US$ 9/bottle), exports for the year to September are down from 2.84 million cases to 1.72 million cases, a drop of 39.5%.” This is data I did not know about and frankly I am shocked. Unless this is an indicator of the overall wine sales to the USA from other countries then I think Australia has a very serious problem. Even though only about 5% of Aussie wine sold in the USA costs more than $8/bottle, the guys making these higher priced wines that are definitely more innovative that those making “commodity” wines. Australia cannot afford to lose too many of those wineries, especially in buy-outs by the brand producers.
    Mike

  2. Tom - November 28, 2005

    Mike:
    Mr. Croser is offering what I think is a fairly straight forward proposition: Talk about quality when speaking to export markets about Australian wine. To this point, most of the conversation has been about value, with a few critical reviews of the best wines.
    What’s interesting is the suggestion that quality be linked to terroir and, to a degree, Australian know how in the vineyard.
    He’s right. Even those “Fine Wine” makers who really don’t care about terroir still talk about it as though they do because it is the current framework in which quality is categorized. Croser’s proposal, if carried out, would take a few years to yield significant results (higher overall prices for all Australian wines and greater exports of Australia’s best fine wines). But the results would come.
    Australia is in a cyclical down turn. It will come back. When it does, prices will rise along with the perceptio of quality.

  3. maggie - November 28, 2005

    Anything can be used as a marketing ploy these days. For instance “Napa” is used AND abused. But if it became important to more people, the concept of terroir….well, then it couldn’t be abused. Could it? People would know the difference. You can only blindly market to the taste blind.

  4. Dave - November 29, 2005

    Tom
    Croser did indeed give the above talk at a speech to the NSW Press Club last year which I went to (James Halliday did his Parker bashing address at this years event last Friday)…
    He is spot on…and I had a brief chat to him about it on the night. There are efforts being made in the right direction over here…in some cases groups of winemakers from one particular region doing brief roadshow overseas…sort of being a bit over shadowed by the doom and gloom of the grape glut over here at the moment though…
    Cheers
    Dave

  5. huge - November 29, 2005

    US imports of Australian wine are indeed down significantly (on a $ per liter basis). I notice fewer and fewer Aussie options in wine shops as the options turn more toward YT and Little Penguin. Too bad.
    Whether we call it terroir or quality, Australia has it, they just need to get it over here.
    /huge

  6. Mike - November 29, 2005

    Tom and Dave
    Sorry to disagree but the reason why all the talk on Aussie wine is about value is IMHO because that is where the sales are (certainly for wine at less than $8/btl). Also road show and advertising just won’t make big in-roads into consumers spending more for “fine” wine. To produce and sell more “fine” wine means going head-to-head with the high end European (i.e. French) and American wines, and/or creating a larger consumer base willing to spend more, MUCH more, on wine.
    As I see it these two problems will require different approaches by the Australia wine industry
    1) Competition with “fine” wine from elsewhere. This is possible especially against the American wine industry which is much more similar to the Australian model – while both countries have been making wines for well over 150 years the real improvements have occurred in the last 30 or so years. Due to things like the “Judgment of Paris” there is a global perception that the USA is a producer of “fine” wine, but Australia can (and IMHO is) closing that gap. The Old World (especially the French) are a much tougher nut to crack. The nature of the industry with its classification system and the relatively unchanged nature of both regions and vineyards provides a history that, for many wines, goes back to the phylloxera era and earlier. The New World does not have that sort of history. Australia’s Langton’s Classification is only 15 years old, and Grange (and maybe Hill of Grace) is really the only globally known Australian wine that ages well for decades. The folks who buy “fine” wine expect it to be able to age, and are willing to pay large amount of $$ for wine with an established history of age-ability. Assaulting the mountain that is the established reputation of the top French wines will not be a trail easily climbed by very many “fine” Australian wines.
    2) Creating a larger consumer base willing to spend more, MUCH more, on wine. This is where much more of the pay-off might lie, but it will need serious education of the semi-serious wine drinker. The Australian wine industry needs to identify what makes a wine drinker go from an $8 bottle of Rosemount Shiraz consumed on the day it is purchased, or very soon after, to someone who will seek out a limited production, single vineyard Shiraz that costs over $40 per bottle, and be willing to let it sit in a cool dark place for 5-10 years. Educating the enthusiastic wine drinker is not easy. Since the late 1980’s I have attended a number of tastings held by various retail shops in San Diego where “fine” wine can be tasted and discussed for pennies on the dollar. I consider this one of the best ways to not only taste wine, but meet with like-minded folks and learn about wine. But more often than not these events rarely have all available seats occupied, and are an ever changing mix of folks – with only a few regulars. Educating people about wine, especially “fine” wine needs a fresh approach. Australia will have to come up with a new way to do it if they want to increase interest in “fine” Australian wine.
    Mike


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