American wine writer Dan Berger gave this year’s Wine Press Club of New South Wales Annual Lecture (below) in Sydney on Wednesday entitled “The Quality or the Critter? Australian Wines and the American Palate”. One year on from James Halliday’s lecture, he made several points that were almost as controversial as Halliday’s, among them that Australia actually has a shortage of the right grapes and that wine consumers should be given more information about the pH of individual wines. As one who has addressed the Wine Press Club of NSW myself under the mistaken impression that its members are members of the press, I can assure you that the speech will have been heard by the great and good throughout the Australian wine industry.
It’s truly an honour to have been asked to address you this evening, since the Wine Press Club of New South Wales is one I respect and which is rare in the world of wine. What follows may seem a tad disjointed. That’s because of the astoundingly complex nature of the subjects I’m going to address – subjects that are really connected in a sort of syllogistic way, but which may seem to be randomly patched together like a crazy quilt.
However, after 30 years of writing about wine, and after nearly 40 years as a professional journalist, I believe my conclusions here are not only valid, but point to a solution to the problems that face the image of Australian wines in the world today and over the coming years.
One of those problems, as I’m sure all of you are more than aware, is the so-called sea of wine that presently occupies tanks, barrels, puncheons, and perhaps even some silos throughout Australia. This surplus of wine may be real, but the meaning of it, and how it is being viewed, is anything but.
As you know, news directors for the world’s print and especially airwave media often are called creative if they can craft headlines from such raw information. But, of course, the word “creative” also means, “to create - notably from scant material.”
And the current “crisis” of excess wine is a classic example of Chicken Little hollering that the sky is falling combined with that of the boy who cried wolf, as well as a number of other Mother Goose tales.
I’m sure you all have seen the recent issue of Newsweek magazine’s “The Bulletin” in which there is a story on how the surplus is hurting grape growers in Mildura. The heart-rending photos were precisely targeted to help justify the story’s impact. All you needed for this was some people who were clearly hurting financially, the spectre of the ogres who had created this mess in the first place (which are the giant wine companies), and the imminent collapse of family farmers who were obviously victims.
This is not the only example of selective reporting of this “wine glut” story. Many more of them on television and in newspaper reports have been as gloom-and-doom-ish, with almost none of the reports going far enough in explaining how the crisis came to pass.
Purely and simply, this is a case of the typical boom/bust cycle that has a way of inevitably repeating itself in many financial endeavours, but mainly in agricultural sectors. It is generally caused by the desire to get onto the money-making band wagon and participate in a boom, without a great deal of concern for the consequences that are sure to follow.
It’s a bit like the athlete who takes performance-enhancing drugs because of the boost in skill level, not to mention salary, even though he or she knows that there will be a day of reckoning. That may come with an untimely revelation of the misdeed and consequent expulsion from the sport. Or it could come in an earlier-than-normal onset of physical ailments or even an earlier-than-normal demise.
The current situation facing the growers in Australia has happened before, just as it has occurred in the large and vital California wine industry. In the past, it was spurred on by the lure of fast and sure dollars from a rapid expansion of wine sales. And the planting of new hectares accelerated through the kind assistance of government tax schemes that encouraged new plantation of vines almost irrespective of what was being planted where.
All of this impacted the existing, long-term “family” farmers, who are, like it or not, victims in the game, in ways they surely must have been aware of. But are they partly responsible for the current crisis?
Look at it this way: Assume that Grower A has been in the wine business for decades, selling grapes to Wine Company R at a set price on a handshake agreement. Grower A sees that all around him, competitors are planting hectares and hectares of wine grapes. This is, most obviously, serious competition that could lower how much he gets for his grapes.
So did the grower go to the offices of Wine Company R and suggest that, because of his long loyalty to the wine company, he’d like a bit of protection from the possible imbalance of supply and demand? If he did and was rebuffed, why was that not in the story?
And if he didn’t go to request a contract rather than a handshake, why was that not in the story?
The creative news director’s created wine glut story never asks some questions because they could weaken the impact of the story by pointing out that Wine Company R may not be such an ogre after all. It is simply a business being run by business people, and it seeks to buy grapes at the lowest possible prices for the commodity wines that it makes. And if the tax-incentivized newer plantings yield cheaper grapes, the loyalty factor in the former relationship between Grower A and Wine Company R becomes diluted.
If you want a graphic example of how the boom/bust cycle has affected other industries in the past, look at the tulip bulb fiasco of the 1600s in Holland – a fascinating tale of a created crisis in which there were many losers. Another example is the price of petrol. OPEC could easily choose to increase its production figures, but by artificially holding production down, prices rise.
However, one key point here is the controversial so-called critter wines that have been the butt of so many jokes within our wine-journalism community.
Many of us, and I’m as much to blame as anyone here, have joked about the critter label phenomenon. But the more I thought about it, the more I realized that the critter craze actually could help shrink the wine surplus. I have spoken with a number of what I call “near-wine drinkers,” those who consume wine once a week or so.
These folks do not seem to have a great deal of brand loyalty, and to them the critters are “cute,” and they have obviously supported them since the wines are selling. Even the normally stodgy wine companies are having fun with the critters. Two recent examples in the US market are brands called Three Blind Moose and Herding Cats.
Moreover, there are people out there who buy their wines almost solely by the appearance of the label, and lots of these labels are valuable. For example, California wine maker Randall Grahm developed a Zinfandel label by calling it Cardinal Zin. It became such a hit, selling more than 100,000 cases a year, that the brand was recently bought for a huge amount of money by a large wine company.
Now let’s move to another element to this story: the fact that Australian wine sales are still increasing, although at a smaller rate than in the recent past.
One key element here is that Australian wine still commands a lot of respect with American buyers, and notably at higher price points.
As an American wine journalist, as well as a wine lover and wine critic with a strong opinion on many issues, I can tell you that, in general, the higher you go on the price scale for Australian wines, the more quality you get. I cannot say the same for French, California, or Italian wines. At the highest price levels in those wines, a huge part of the price you are asked to pay is a function of what I call the Red Ferrari Syndrome. No one buys a bright red Ferrari and parks it in the garage. You display it in front of your house.
Yes, it can get you to the supermarket and the dry cleaners, but that is, most decidedly, not its main function. Its main purpose is ostensibly the same as the raison d’etre of the Movado Museum watch, the Gucci Bag, the Mont Blanc pen, or any number of other iconic, image-building baubles.
Who buys a Rado because it keeps better time than a Timex? No one. And that is why Pétrus, Screaming Eagle, Ch Le Pin, Ornellaia, and many other icon wine brands are priced the way they are. Are they three, four, ten times “better” than other wines?
Some writers would have you believe that these wines are that good. But blind tasting – which they never do – would reveal their true worth as related to other less pricey wines.
So I ask the question: which came first, the high score or the high price?
Rather than answer that directly, let’s look at some of the issues surrounding quality with a series of questions, each of which you can answer for yourselves.
Is Grange the greatest of all red wines made in Australia?
Why is Australian Grenache so under-appreciated? And, why are a couple of Australian Grenaches so highly praised when other clearly better Grenaches are ignored? Could it have something to do with the prices being charged for them?
Why is Australian Riesling not more highly prized than it is? Why is Semillon an afterthought for the vast majority of wine buyers?
Now let’s swing back to your wine glut for a moment. I called Peter Gago from Penfolds last week to chat about the wine surplus that seems, from news reports, to be strangling the entire wine industry. Peter is responsible for a lot of wine, and he has a lot more to sell these days than he has had in the past.
Yes, said Peter, he has a lot of wine to sell, but this is a situation that arises now and then due to typical and anticipated boom/bust agri-cycles. It isn’t fun, but given time and some creative marketing, it will be solved. Such crises usually are solved over time.
But, he pointed out, this surplus mainly affects wines in the commodity sectors, and has a lot less impact on boutique producers of $30 Shiraz, and $25 Chardonnay. In fact, companies with access to more grapes than they normally see can upgrade the quality of their wines painlessly.
But Peter also said something fascinating about the current state of wine in Australia. He said as far as he is concerned, there is a shortage of many different wine grapes. He said, for example, that for top-rate Chardonnay, he sees a shortage of cooler-climate fruit. There is a shortage of quality Sauvignon Blanc. And a shortage of a number of other grapes as well.
This is due, he said, to planting of too many hectares of the wrong grapes in the wrong locations, and not enough of some varieties where they could make superb wines. Yes, Penfolds, Hardys, Fosters and other large companies make a lot of wines that sell in the commodity sectors. But they also make high-end wines and these are wines that must compete with the world-class, pricey iconic wines that sell for ludicrous sums to those buyers who do not taste them, but who rely on 100-point scores from US wine critics for their buying guidelines.
And despite the glut of wine that affects commodity wines worldwide, the major Australian wine companies still must get their hands on super-quality grapes to make their higher-end wines that sell at the upper echelons of price.
This is not true of most large American wine companies. The Wine Group, Bronco, Gallo, Delicato, and a number of others have no wines in the quality range the way medium and larger wineries do in Australia.
Now let’s switch to the subject of where Australian wine will be in the next few years, and let’s look at how it has grown in Great Britain and the United States over the last decade.
When your industry leaders came up, in 1996, with a scheme for sales of wines in the United States by 2025, a few of the proponents were sceptical. But the quality of your wines (about which I could speak for yet another hour!) persuaded Americans to buy Australian wine in greater amounts than your target plan had anticipated. And at a faster rate.
It was this success, in part, that led to the demand for more wine, and that led growers to plant far more grapes than were prudent, leading to the current surplus situation.
So now let’s see if we can tie all these pieces together into a coherent strategy for the next few years.
For one thing, we know for sure that some growers may well be hurt by the current wine glut, but that soon, perhaps within a year, wine sales and strategies to reduce the surplus will once again have wine back into some sort of equilibrium. Along the way, some acreage that isn’t vital (or producing high-quality fruit) will be pulled out, and tonnages will come down.
So where does Australian wine now sit?
The Chinese language has a word that has two meanings. One meaning for this word is crisis, and the other is opportunity. And the current situation is what is made of it.
I believe that among the strategies that ought to be employed are some or all of the following:
1. Highlight your regions.
One aspect of Australian wine that has not taken hold in the United States (and I suspect in Great Britain) is the recognition of your regional characteristics. The vast majority of Australian wine sold in the US is designated as South Eastern Australia. And a lot of the regional wines, such as those from Coonawarra, Barossa, Clare and Margaret River, are being sold at lower prices than I think they deserve, in part because some consumers believe that all Australian wines ought to be bargains.
But a truly fine Clare Riesling at $17 is a bargain, since it is a unique product. So is an Adelaide Hills Chardonnay for $22, a Coonawarra Cabernet Sauvignon at $19, and a Hunter Valley Semillon at $16.
But no American wine consumers will get the word about the uniqueness, and the great values, of these wines until a campaign is mounted to explain to the American consumer that there is a distinctive difference between a wine designated as South Eastern Australia and those designated Victoria, or Orange, or Mudgee, or
Limestone Coast.
I just returned from a little two-day trip to the Grampians and the Pyrenees, and what was evident there is that a distinctive style of red wine, notably with Shiraz, can offer a delightful change of pace for consumers who are savvy enough to ignore the numbers game. Call it what you will, but that vast SEA of wine isn’t very exciting, but regional wines like those of Eden Valley, McLaren Vale, Pemberton, and Mornington Peninsula.
Which leads me to the next bullet point:
2. Eschew number mongers.
The deck is stacked against your wines in terms of the US reviewers who use 100-point scoring “systems.” Such a limited device works against uniqueness and regional distinctiveness. It seeks mainly to reward the same sort of power-packed wines that always get the highest scores. When was the last time an Australian Riesling, Semillon, or Grenache got a score in the 90s? And if one did, I’d bet it was high in alcohol, oak, and pH.
I realize that some of you in this room use 100-point scores in your reviews. I was told two decades ago that it was inevitable, that the consumer likes them and wants them. But in reading many of your words over the years, both on site here in Australia and on the internet, I know that most of you take regional distinctiveness into consideration when you use your numbers.
This is most decidedly not true of one of the worst American offenders, who I suspect has an insurance policy against making any embarrassing errors in his scoring. I can give case examples, but let’s just say that his scores often reflect a pattern based on the image of the winery. He looks back to last year’s score and replicates them for this year’s wine closely.
One key factor: improper use of 100-point scores leads to one-dimensional wines dominating the upper end. The result is that nuanced, distinctive so-called food wines are shoved down the list, sending the most inappropriate of messages to the consumer.
The result is that anything not blockbusterish, hedonistic and laden with all sorts of non-wine elements (such as oak) are banned to purgatory. And this has the effect of educating wine makers to craft wines to fit one person’s palate rather than food at the dinner table.
As for the industry, I would suggest to them that they back away from using numerical scores in their overseas marketing efforts, and concentrate on the results of your wine competitions. Which leads me to…
3. Launch campaigns highlighting gold medals and trophies at wine shows around the world.
Your judging systems around Australia periodically take a bit of heat from some wine critics who challenge their validity. But I can tell you from personal experience, having judged the OIV shows in Europe and a number of competitions in the United States, the Australian show judging system for wines is one of the best in the world.
I teach a course at a local college in Sonoma County, and I tell my students that – in addition to my own Riverside International and Long Beach Grand Cru wine competitions – the Australian system produces superb results that are not only replicable, but help both the industry and consumers to discover the best wines. [See my article about my forthcoming tour of duty as Australian wine show judge – JR.]
4. Empower the consumer with factual data.
Structure is one of the most important aspects in wine, and the consumer ought to be provided with as much detail as possible. Assume for a moment that a wine maker decides to make a wine specifically to score a lot of points with some key wine publication, and to that end the wine is made with a lot of alcohol, a lot of oak, and is softer than the wine maker typically makes the wine. We all know that such wines may well impress when they are young, but may collapse in a few years, and certainly are a long shot to age.
Now assume that a consumer buys a lot of this wine when it’s young because it tastes great, but that seven or so years later opens a bottle and finds it hasn’t aged well. The backlash will be evident.
If we tell the consumer what the acid and pH of the wine are, he or she might well be able to make a more informed decision on what to buy. Wine with decent pH and acid levels are targets to age for a bit, and those with a higher pH and lower acid are shorter term wines. But additionally, wine with higher acid and lower pH are better with food than wines with the converse numbers.
The fact is, most Australian wine makers are far more technically correct in maintaining red wine pH levels at 3.55 or under, giving the wines better balance. In Napa Valley these days, the average pH is about 3.7, with most high-end Cabernets at 3.8 and higher, which makes them unstable at best, and at worst likely to be dead dogs within a decade.
You might argue: how many consumers can interpret these numbers? That is not the point. Those who CAN interpret such numbers are the consumers you want to win over and hold onto. If the acid and pH numbers seem like another language to many buyers, they at least do one thing: they alert consumers to the fact that the wine maker and writer are technically skilled enough to know what’s in each wine, and that’s another way of differentiating wines from sub-regions from those designated as South Eastern Australia.
I believe it is the duty of wine writers to alert consumers to issues of pH and total acidity. Otherwise, consumers will forever remain in the dark about this vital issue. Or worse, they will get their only numbers in the form of 100-point opinions from far-flung writers who rarely visit your nation.
5. Tell a story.
We also owe the consumer more of a story about the wines we’re recommending. Is there something unique about the vineyard site or growing area, a new wine making procedure, or something else that sets this wine apart? If so, we should say so, not just some vague comment about this being a great wine to serve on Boxing Day or when they’re playing the AFL Championship game.
6. Focus more of your efforts on Riesling and rosé and dessert wines like ports, sherries and muscats that are classic Australian offerings and which are unique here.
Rosé is a superb opportunity. We have seen a handful of smaller producers making a few hundred cases that are snapped up quickly. Still, some wine buyers look down their noses on such items.
Moreover, the demand for Riesling here is as great as it has been in some time, yet still growers seem reluctant to get behind it in the proper regions. Americans bought some 55,000 cases of Australian Riesling in 2005, which you might say isn’t very much. But consider that that figure is a 40-fold increase from Australian Riesling sales in the United States just five years earlier.
As for your dessert wines, they are some of the world’s finest, and yet the only time I see overt praise for them is about the coldest days of winter. If we all don’t stand behind these amazing products, they one day may be just a memory.
A final concluding point.
Americans’ interest in the fine wines of Australia has not wavered over the last decade. Overall, your wines grew in volume in the US market by about 25% a year for nearly a decade. The fact that Australian wine sales in the United States grew by only 8% over the last year should not be misunderstood since the dollar sales total was almost double that.
In a strong verification of the strength of regional Australian wines, one of the largest US wine companies, Beam Wine Estates, has just entered into an agreement to import and distribute the wines of St Hallett and Petaluma, among other southern hemisphere brands.
This is yet another plus for Australia’s regional wines and another reason to look at the current glut not as a crisis, but as an opportunity.
The future of the Australian industry based, as I see it, on highlighting the greatness of wines in your sub regions, is a lot brighter than today’s news reports could ever show.