The Paradigm of Wine

Paradigm
I love reading predictions, particularly those that come at the beginning of the year. They usually are very good recaps of those trends that flew just below the radar the year before. Laurie Daniel of the San Jose Mercury news has a nice set of predictions for the wine industry in 2008. They amount to higher prices on imports due to the weak dollar, the "greening" of the wine industry and more transparency in wine packaging and the emergence of wine from obscure places. It’s a very read.

But reading it, I began to notice that Laurie did not make note of any significant structural changes to the wine industry. By that I mean changes that change the way we interact with wine, the way we sell wine and the way the wine industry actually functions.

This shouldn’t be a surprise since paradigm shifts in any industry or discipline are rare to say the least. Also, they tend to happen slowly, gradually coming into being. But have you ever wondered just what kind paradigm shift could arrive in the world of wine that would result in a structural change?

This is a pretty straightforward industry. Grow a crop, process it, market it, get it to market and sell it. This basic format has been with us for centuries. And it won’t ever change. What changes and what brings around apparent paradigm shifts are revolutions, technological or attitudinal, in the way we approach this very straightforward industry.

Are any such changes coming or are we in the midst of any now?

Growing Grapes: To date it appears that photosynthesis still rules the day. I don’t see any paradigm shifts in the works. Organic grape growing is not a shift. If anything it is retro in nature.

Making Wine: Again, fermentation is still king here. Technology simply allow us more precise control of the process. The recent emphasis on BIG wines isn’t so much a paradigm shift but a reminder that the winemaker has control over the process in a way they did not in the past.

Marketing Wine: Despite the different ways we now have for marketing wine (meaning, how we communicate with those who will buy it) it always comes down to the same thing: "Hey, buy this…It’s really great!!".  Explaining why the wine is great is where the creativity comes in. But I suspect the English Port barons who brought the wines into England centuries ago at some point turned to their customers and said the same thing: "Hey, but this. It’s really great!!".

Getting Wine To Market: Here’s the paradigm shift. The combination of common carriers and Internet sales is changing everything. The laws still need to catch up with the technological capability and the desires of the customers. They’ll catch up. There’s just too much to be gained by all concerned for them not to. This paradigm shift is a blow to the state mandated three tier system, but it’s not a blow to the general system of using wholesalers, who will always be needed to bring wines to market.

I was talking to a colleague about this subject and they suggested that I hadn’t given consideration to one possible paradigm changed: The retirement of Robert Parker, Jr. Would the elimination of the Wine Advocate really bring about a radical shift in the wine industry? I don’t think less wine would be purchased. Nor do I think marketers and consumers would stop relying so much on reviews and scores…they’d get them from others. What would change, I think, is that certain wineries could not depend on Robert Parker to be their marketing and PR agent. But that’s no paradigm change. Wineries go through PR firms and marketing agents pretty quickly the way it is.


6 Responses

  1. Christian Miller - January 2, 2008

    Here are my predictions for 2008:
    February 08 – The fine wine world is rocked when it’s revealed that Michel Rolland uses Flintstone grape jelly glasses for his analytical tastings. “This explains a lot,” say some sensory analysts, wondering if there is a subliminal effect.
    March 08 – Riedel sales plunge 35%. Owens Corning seizes wine glass industry lead with a series of jelly glasses depicting the Mondavi winery saga, with Robert and Peter in the roles of Fred and Barney.
    July 08 – Riedel responds with a joint venture with Welch’s : a Napa Reserve Grape Jelly, aged in oak and pre-packaged in jelly jars depicting the world’s great vineyards. Jim Laube, unaware that his sample is not wine, gives it a “95” in the Wine Spectator, praising its “density and richness.”
    November 08 – Jonathan Nossiter announces plans for a new documentary that will depict a “vast overarching conspiracy” between Welch’s, Robert Parker, Monsanto and Mel Knox that explains global warming, Aussie Shiraz, the price of French oak and the end of terroir.

  2. Mike Carter - January 3, 2008

    Bottom line is that wine producers are stuck between a rock and a hard place. Over production and the power of giant retailers forced wine producers to compete mainly on price which turned wine into a commodity product. If disruptive change is ever going to happen it will come from outside the wine industry.

  3. Steve Heimoff - January 3, 2008

    I think the big thing of the future is going to be PR and marketing. How to push product, make that sale, catch that customer. Wine critics will be more important than ever. If and when Parker retires, that vacuum will be filled by others. The blogs will have a bigger role to play, too, as more (and maybe younger) consumers look to their computers for guidance.

  4. Steve Heimoff - January 3, 2008

    I think the big thing of the future is going to be PR and marketing. How to push product, make that sale, catch that customer. Wine critics will be more important than ever. If and when Parker retires, that vacuum will be filled by others. The blogs will have a bigger role to play, too, as more (and maybe younger) consumers look to their computers for guidance.

  5. Jason O. - January 7, 2008

    Great thought-provoking post. I could definitely go on and on.
    However, the main thing I think we’re going to see change is the three-tier system as we know it. While many big box wine retailers are aggressively trying to cut out the mandated “middle-men”, we see the same sort of mechanic in industries where no middle man is mandated. Retailers claim that distributors do nothing but push the product along and collect profit, which is oftentimes true. However, suppliers can’t talk to thousands of retailers/restaurants and retailers/restaurants can’t talk to hundreds of suppliers. If we look at other industries with successful distribution mechanics, we see that distributors there stay relevant by moving closer to the supply-side. In wine distribution there is no other option since distributors are forbidden from getting too close to end-sales. However, distributors working more closely with their suppliers is good for the industry overall and will better protect suppliers’ interests while rewarding those that adhere to clients’ wishes and become a better conduit between the two.

  6. Talisker - January 23, 2008

    While 2008 might be a little early for it, wouldn’t climate change be paradigm-shifting? If apparent trends continue, existing grape-growing regions will have to adapt radically to new conditions, while new regions find themselves able to grow grapes that produce good wine. Pretty big shift in paradigm…


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