finalanalysis

(Hello, THUMP THUMP, is this thing on? OK…)

“If something cannot go on forever, then will stop.” The wine business has begun to test the limits of Stein’s Law at both the high and the low end of the market.

Last week the Winemaker’s Federation of Australia along with three other trade groups published a report that makes for dismal reading for anyone even tangentially associated with the Australian wine industry. In a nutshell, “Structural surpluses of grapes and wine are now so large that they are causing long-term damage to our industry by devaluing the Australian brand, entrenching discounting [and] undermining profitability.” This has led to an “accumulated surplus of 100 million cases of wine that will double in the next two years.” What’s more, “The problems are national – although some regions are more adversely affected – and are not restricted to specific varieties or price points.” The report suggests that 20% of Australia’s vines will need to be removed.

The EU went through this already and is set to grub vines that would otherwise produce mediocre wine that would flow into Europe’s “Wine Lake” and be subject to “crisis distillation.”

So when will this trend hit California? During the 90′s and 00′s, California’s wine growing regions have been awash in money as people who made a large fortune elsewhere try to make a small fortune in the wine business. The formula is often the same:

• Find a spot with some famous neighbors,
• hire a famous viticulturalist to plant the vineyard,
• hire a famous winemaker and perhaps an even more famous consulting enologist,
• put the wine in a bottle heavy enough to bludgeon someone with,
• label it with a multi-color foil embossed label,
• pack it in wood boxes,
• wait for the critics to fawn over you,
• repeat in subsequent vintages.

And for many people it has worked. For some, it still is. But now the “super seconds” i.e. wines that followed the formula but haven’t quite acheived cult status are languishing. Some estimate that 30% of this year’s crop in Napa Valley will go unsold. For some varietals grape prices are 20% of what they were last year. Stories abound of growers giving away fruit in hopes that, “when things turn around” the famous producers will remember them and pay them a premium once more. Under these circumstances, it is perhaps a blessing in disguise that the 2009 harvest is so light.

But in spite of this, California wine prices are still at record levels. Any discounting is being done quietly, surreptitiously. No one wants to admit that the music has stopped. But the evidence continues to build. California has it’s own “Wine Lake” but unlike the EU, where the excess wine is cheap, or in Australia, where it hits a range of price points, in California, the overproduction is solidly at the high end. Steve Heimhoff’s comments are instructive in this regard. Wineries have leftover wine they can’t sell, but they won’t discount it unless they are absolutely forced to.

Europe and Australia have looked into the abyss and are making the hard decisions that will make their wine industries sustainable in the long term. California still has a long way to go in this regard.

Via Felix Salmon, and of course the New York Times, we learn that the New York Times has a wine club. The Times sold the rights to their name to Global Wine Company, who will manage the club under the Times name in the same fashion they have done for Omaha Steaks or Celebrity Chef Michael Chiarello.

I haven’t had every wine on the NYT club list, but in general the suckitude quotient seems to be pretty low for a mass market wine club offering. Plus, as Salmon points out, you can elect to buy only one shipment of wine and not be forced to opt out of future shipments.

All in all, not a bad offering.

Creative Loafing gives 5 Stars to Restaurant Eugene. I, for one, am thrilled.

Who comes up with these lists?

Nothing against the nominees, but where is KrogBar? Holeman & Finch? Varasano’s has great pizza but is not a wine bar. Why is a private club even on the list? If being a restaurant and having a bar is all that matters, then where is Aria? Canoe? Ecco? You’re going to tell me that Highland Tap has a better wine list than Murphy’s RIGHT ACROSS THE STREET? WTF?

Count me with Steve Heimhoff on this one.

I like and respect Hardy Wallace quite a lot. I think it was a master stroke to keep his quest for A Really Goode Job separate from his main brand, Dirty South Wine. If he hadn’t won, he wouldn’t have tarnished his brand the way some applicants did (Anyone who says that “this Murphy Goode Fume Blanc is the best wine I’ve ever tasted” has lost all credibility in my opinion.).

There is no doubt that Hardy is a social media ninja. That, combined with his wicked sense of humor and impromptu blending skills pushed him over the top. Lots and lots of people were pulling for Hardy to win and were thrilled that he did. But speaking only for myself, while I watched the contest for A Really Goode Job closely, and specifically watched what Hardy was doing, now that he has won, my interest has seriously waned.

During the contest, Hardy (and the other contestants) were selling themselves. Now, Hardy will be selling Murphy-Goode. That just doesn’t interest me as much. I’d rather hear his opinions on the best wine for armageddon.

Right before he won, Hardy and I had a long conversation about how to avoid turning Facebook and Twitter into platforms for glorified SPAM (Note to Atlanta restaurants: You are doing it wrong. I may be your friend on Facebook, but I ignore all of your event invitations. Sorry.). He was convinced that it could be done and he convinced me that if anyone could do it, he could. We shall see.

I have no doubt that he will have a blast over the next six months and walk away at the end with an enhanced toolkit, an Iphone full of new contacts, and a dozen job offers. (On a personal note, I hope he comes back to Atlanta and doesn’t stay in California. The Atlanta wine scene is more vibrant with him here.)

Other bloggers do this, so I can too!

• Starbucks is opening a wine bar. Given that their coffee is over-roasted and lacking in subtlety, what sorts of wine do you think they will serve?
• If you write a wine list, don’t put more than 150 selections on it.
• I’m sure you’ll be shocked to discover that the wine reviewed by critics is not always the same wine that ends up on the shelf.
• Do “aluminum bottles for wine add value to the drinking experience“? I’m going to vote for no, although in general I favor the move toward non-glass packaging.
• Prime Beef and Classed Growth Bordeaux for pennies on the dollar? I’m going to CostCo!
• I told you you weren’t allergic to sulfites!

That is all.

Looks like the Murphy-Goode people aren’t as stoopid as I thought they might be.

What I want to know is, what offers were made to the other finalists?

GO HARDY!

I’m calling bullshit.

I don’t really care whether James Laube likes Shafer One Point Five. For that matter, I don’t personally care what Laube thinks about any wine. His palate and mine clearly favor different styles.

But when it comes to the viability of wine in the marketplace, the man is a giant! His scores can make or break vintages–even wineries. The idea that he can pan a wine as flawed, agree to disagree with the winemaker, then leave it all to the market to sort out is false modesty at best and disingenuousness (disingenuousity?) at worst.