Progress Vs. Regress In Wine & Society

Look around our culture and society and take note of the innumerable ways INNOVATION drives our daily lives and the way this force of nature constantly propels forward commerce into new territory.

Innovation in the wine industry however, while ever present, bumps up against the kind of barriers that simply do not exist in so many other areas. While computing, telecommunications, healthcare, travel, publishing and so many other industries seem to move foreword faster than most of us can account for, the wine industry moves forward at a pace that, while it still can be described as forward, is really slow enough for us all to witness, catalog and understand with no fear of falling behind.

Yet, it is important to stress that innovation in the wine industry does indeed exist and is constant. Innovation in distribution is probably the most visible. The slow emergence of the consumer as king is a result of innovation in shipping laws. This change will intensify as the industry adopts new and, yes, innovative ways in which to stay in contact with the consumer and for the consumer to access what they want when they want it. Meanwhile, the next target in distribution’s innovations will come, again, at the expense of the wholesaler. Count on wineries to find new ways to get their wine to restaurants and retailers in a legal way AND a more direct way.

In the area of packaging innovation has become standard fare. Five-Hundred ML bottles, synthetic corks, better real corks, screwcaps instead of corks, Zorks to replace corks, boxes of wine, bags of wine, cans of wine. And you might even count the importance of animal labels as an innovation meant to lighten the often dogmatic adherence to traditional labeling.

Clearly production techniques are at constant threat from the innovators. Around the world smart, scientists and gutsy growers are developing new ways to trellis vines, new systems for irrigating, and new ways to deliver nutrients into the vine. Inside the winery we’ve come across effective ways to strip out the alcohol, efficient ways to darken the wine, and ways to make the wine smell and taste just as we want.

And of course the media that delivers the good news innovates too. The 100 points scoring system is in fact an innovation that is very recent to wine. In fact the very idea of a "wine magazine" is fairly new. But then for real recent innovations you need only count the number of consumers who get their news from the wine forums, wine websites and wine blogs, like this one.

Yet with all this, the wine industry lags behind most other industries in the pace of innovation. The reason for this?  Ancient Ways.

Winemaking and wine selling are ancient and traditional industries in which most things, from production through sales, are not just set in stone but legislated and regulated into stone. The result are institutional barriers to innovation.

Consider distribution. In America one has to obtain usually at least two licenses to simply hold a wine with the intention to resell it. Add to this the well known three tier system. It is an arbitrary construct that in most cases was legislated into place sometime in the early 1930s. Since then very little has changed. This institutionalization of the method by which wine may be moved to market has led to the adoption of faulty assumptions about what works and who is entitled to control a process that needs far less control than what currently exists. Simply to be able to TALK about whether a winery in one state can ship to a wine lover in another state a Supreme Court decision was necessary along with the deposit of literally millions of dollars into the hands of lawyers, lobbyists and lawmakers. Consider that in nearly every state in America it is illegal for a retailer to buy a bottle of wine from a winery in another state just to put it on their shelf.

Innovation will eventually change the current three tier distribution model.

Packaging too is subject to barriers put up by tradition and regulation. Take the cork. The notion that wine has needed a new and better closure has been around for at least 25 years. Yet today a combination of tradition and national economics in Portugal prevent full adoption of alternatives that fix the problem of leakage and taint. And what of labeling? Every single label in America must first be approved by the federal government. Regulations in place tell me, a marketer, what words I can and cannot use on my label. Meanwhile, words like "Reserve", "Barrel Aged" and "Old Vine" can be used in nearly any fashion I desire. Reason is not at play here.

Finally, consider production and innovation. We’ll look at France. The AOC system demands that particular vines be grown in most appellations. Along with this yields and production techniques are also usually regulated. So onerous are these regulations, not just in France but in many other European countries, that those who are regulated actually believe that the rest of the world should adhere to their government’s rules on production in order to sell wine on the continent. Here we have an example of being so heavily regulated that the regulations appear normal to those who are regulated, rather than being understood for what they are: artificial barriers to innovation. Would Syrah from Bordeaux made at the Petrus be any good? We’ll never know. How would Gewurztraminer taste made from vineyards in the most northern reaches of Burgundy? We’ll never know. The system there has made such an innovation economically impossible to pursue.

Ancient industry’s have ancient rules many of which serve in the present to stifle innovation, preserve and enhance the wealth of a few and, most ominous, prevent even the contemplation of change. And yet, innovation occurs. How encouraging this is. It speaks mainly to the trait of civilized and uncivilized people alike to value change and their dedication to the notion that progress equals betterment. No matter how hard the forces behind the status quo or those that advocate for a return to the past work, this compulsion to progress usually overrides everything else. I was spurred to consider this upon hearing of a judicial decision that came down today in Pennsylvania stating that progress is better than regress.

Posted In: Culture and Wine


2 Responses

  1. Jathan - December 21, 2005

    Well written Tom, not much can be added here. (Are you trying to win the top 5 posts of the year challenge?)
    Certainly we are nearing a time when drastic changes will take place, and the three tiered distribution model is long overdue for a complete overhaul.
    Innovation will prevail.

  2. caveman - December 21, 2005

    Turning water into wine… tis the season..

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