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Of what value are wine reviews?

A scandal and an unrelated Wine Spectator article prompt me to raise a question about what role wine reviews play in the marketplace. The scandal involves a prominent Canadian wine writer named Natalie MacLean who is accused by an online Canadian wine site of using wine reviews written by others without providing adequate attribution. She is further accused of demanding wineries subscribe to her newsletter before she will review their wine. Many wine bloggers, some of them rather noteworthy, have become extremely exercised about these matters. The WS piece, written by Matt Kramer, is an extraordinarily perceptive, and articulate opinion that flavor descriptors are of minimal consequence compared to characteristics such as complexity, texture, and balance.

I happen to agree with Matt Kramer, although probably for reasons different than his own. More importantly, I think the low regard in which he and I both hold flavor descriptors logically leads to a general disregard for wine reviews, and in particular for massive database aggregations of wine reviews. To me that’s the nub of the MacLean affair. Seeking to offer sortable databases containing tens of thousands of wine reviews is a priori a bad idea. The logistical difficulties alone lead to very questionable results. Garbage in; garbage out. Legal and ethical questions become almost superfluous. If most consumers shared my skepticism about wine reviews in any quantity over batches of about fifteen, the marketplace itself would sort out issues such as ‘pay for play,’ aggregation of copyrighted material, free samples, junkets for writers, etc. Lawyers would have no role to play (other than drinking wines just like the rest of us).

Perhaps unlike Matt Kramer, my problem with flavor descriptors in wine reviews is I think they are way too subjective and individualistic to be of much practical utility. If adroitly done, they can effectively convey a feeling, a mood about the wine. I think that is useful. It becomes harder and harder as one tries to compose unique moods for each wine when fifty to a hundred of them are included in a single sitting. Every human being has a different body chemistry, different taste experience, and different vocabulary. Expecting one person to accurately convey taste and smell impressions which another person would actually experience, using similes (“smells like Damson plums and Belgian chocolate”), is a very big stretch. Written notes with flavor descriptors are useful to help an individual recall their own organoleptic experience, but trying to get a consensus among a group of untrained tasters is really difficult.

This point is buttressed by experiments done at Stanford University by a linguist named Adrienne Lehrer. She would bring in two volunteers, and put an opaque screen between them. On one side would be five glasses of wine labeled A through E. The other subject would get the same five wines labeled 1 through 5. One subject would be asked to pick a wine, taste it, and describe it out loud. How frequently could the other subject pick out which wine was being described? Barely better than 20% of the time, i.e. about the same frequency as random chance. Now, rigorous training of both subjects can improve results quite a bit (as Ann Noble has shown at UC Davis), but how often are wine reviews read by someone who has received rigorous training (irrespective of whether the writer has)?

So when I’m at some big walk-around tasting, and the person pouring tells me I’m going to notice “cinnamon, mango, and just a hint of hibiscus,” I may subconsciously follow their lead. [I took 15 units of directed study on hypnosis in college. I firmly believe in suggestibility, and I’ve been scientifically measured as fairly high on the Suggestibility Scale.] Usually though, I take offense. “I’ll tell you what I notice, thank ya’ very much.”

The value of wine reviews is to narrow the field for consumers, and to prompt consumer interest in trying certain wines. That’s a good thing. I’m not inclined to bad-mouth the whole concept. I just want to imply that wine reviews need to be viewed with about the same degree of credibility one assigns to the political opinions of one’s in-laws. Don’t argue about them (degustibus non disputatum), but feel free to ignore large portions. And the more reviews written at one sitting, the less attention they deserve. Taste 12 to 20 wines (blind); write up 5 or 6. That’s my recommendation to achieve maximum value.

I’ve never met Natalie MacLean. I have read one of her books and several articles she’s written. I think she’s a damn good writer ~ a lot more talented and entertaining than some of the personalities now screaming for her scalp in Canada. Construction of something as dry and boring as a comprehensive wine review database is a serious misallocation of her abilities. There can be little argument, however, about the fervor of her self-promotion. And I suppose that, along with her success, has created a really severe level of vitriol. Vitriol and self-righteousness.

Alder Yarrow (Vinography) is about the only contributor to the comment thread cited above counseling restraint. And he has taken his share of drive-by abuse for doing so. One could be excused, after reading the comment thread, of assuming very few wine bloggers today accept wine samples, or trips, or meals from producers. Oh please! I went on a junket to Chile and Argentina six years ago put on by an American importer. There were about twenty of us, ostensibly all wine writers of some consequence. At one point I proposed to the group en masse that we purchase 15 bottles of wine at a retail store to do a little comparison tasting back at our Mendoza hotel outside the universe of producers the importer was taking us to see. Cost per person would have been about $25 to have a look at several of the best wines produced in Argentina. ZERO (none!) of these wine writers were interested. Maybe it’s my personality.

I think the place Natalie MacLean went wrong was embarking on a promotional path to offer a mobile app which would deliver wine reviews on 150,000 wines that users could access in stores and restaurants. That’s not a worthwhile product. It’s a software engineer’s wet dream. Consumers shouldn’t want it, and Natalie shouldn’t have agreed to try producing it.

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CA Wine Market ~ Past & Future

Sometimes it seems wines just stay the same, as consumer preferences cycle through predictable patterns.

Historical Wine Background

     When one considers something as venerable as wine, two generations seems rather paltry. Forty years isn’t very old for a vine, and it’s nothing but a quick glance compared to the 5,000 years human beings have been seriously turning grapes into commerce. Nevertheless, the knowledge base of humankind has advanced rapidly since 1970, and wine is no different.
     It may be helpful to set the stage. In the early 1960’s there were only a few hundred U.S. troops in Viet Nam, and they were still called “advisors.” At that time nearly half the wine consumed in America was called “Port” and/or “Sherry.” JFK and his dazzling wife were in the White House and setting fashion around the world. Zinfandel was the most widely planted “premium” wine grape in California. The Civil Rights marches in Mississippi and Alabama were just beginning to happening, and 60% of the grapes crushed in CA for white wine were Thompson Seedless. Pills for birth control were about to come on to the market, and Robert Mondavi, although just turning 50, was still employed as a salesman for his family’s winery, Charles Krug. Women still went to college to get an ‘Mrs.’ degree, and you could buy a 1,200 sq. ft. cottage on a half acre in St. Helena for $30,000. Of course if you lived in St. Helena, you’d have to drive to San Francisco to get a good restaurant meal. The 280 freeway down the Peninsula from San Francisco had not been built yet, but South Bay wineries like Paul Masson, Almaden, and Mirassou were prestige players on the national scene. Seven years later, in the late 1960’s, while Jimi Hendricks and Janis Joplin were setting the tone musically, Gallo’s Hearty Burgundy was hailed by the New York Times as particularly noteworthy amongst international wine competitors because it was sound, clean, reliable, and reasonably priced.

Consumer Wine Style Preferences

     Yeah, things have changed.
     But I’ve changed too. Sometimes it is hard to say the wines or the marketplace have really changed more dramatically than my own preferences and opportunities have…

     To read this post in its entirety, including commentary about changing wine styles and the importance of future markets, visit the Stanford Wine Blog.

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Hearings to start on HR 5034

The Fat and Lazy Wine Distributor Full-Employment Act of 2011.

Hypocrisy of Opposition to Direct Shipping

Inter-state shipping of wine to consumers, usually called ‘direct shipping,’ is an enormous controversy in this Age of the Internet, and has been a simmering controversy for thirty years. The latest effort is a bill (HR 5034) introduced to Congress by William Delahunt (D-MA) with 139 co-sponsors. Judicial Committee hearings begin 29 September 2010. Eventually the matter will be settled by the Supreme Court. Meanwhile numerous politicians collect campaign donations from big wholesalers in many states by carrying water for them in the form of legislation against Direct Shipping. “Inter-state shipping of alcohol facilitates under-age drinking,” is their common refrain. What a crock! Air-freight shippers require an adult signature for alcohol deliveries. I’m not sure gun shipments can say the same. How many sixteen-year-olds do you know who buy alcohol by paying $30 or more for a bottle of wine, and then waiting a week or two for delivery?

U.S. Wine Laws

Let us start with the legal issue. When Prohibition ended in 1933, Congress granted to the individual states a right to regulate sale of alcohol within each of their borders. That led to a bewildering welter of different laws. Some states became ‘Control states,’ much like the Canadian provinces, where sale of alcohol was restricted to state-run stores. Pennsylvania would be an example today. The attraction is obvious: state stores generate a huge amount of income for the government. And state stores don’t have to be run by the governor’s idiot nephew. In the province of Ontario, Canada (read Toronto), the L.C.B.O. has some of the most knowledgeable wine people in the world serving a well-developed community of connoisseurs. Eastern Pennsylvania (read Bucks County and Philadelphia) by contrast, has turned the wine buying public into commuters. Some of the best retail wine stores in the world have operated for decades just across the Delaware River in various hamlets of New Jersey.
     Other states chose an alternative and became ‘Franchise states.’ Georgia is an example. That means any producer or importer seeking to sell their wine in Georgia must appoint a distributor who then holds the ‘franchise’ for the brand in the state. Whether they ever sell any product or not! Getting one’s ‘franchise’ back from an underperforming distributor in Georgia is next to impossible. Other states went for ‘local option,’ which means small geo-political entities can decide for themselves whether or not to allow sale of alcohol. Some 10% of Texas, for instance, is dry. Visit Lubbock sometime. Note the gigantic liquor stores all clustered like car dealerships next to the freeway south of town. That’s the county line. Lubbock, the college town home of Texas Tech, is dry. In other parts of Texas, like Houston, holders of a second class alcohol license must buy the alcohol they resell from holders of a first class license: a kind of entrenched alcohol feudalism.

Why Direct Shipping Shouldn’t Threaten Anybody

Throughout this quagmire of different regulations and practices, one general principle is dominant, the Three-Tiered Distribution System (hereinafter ‘TTDS’). Producer (or Importer) pays a Federal excise tax upon sale of the product to an in-state Distributor (sometimes called Wholesaler). That’s tier #1. Then the Distributor pays a State excise tax upon sale of the product to a Retailer (or Restaurateur). That’s tier #2. Finally the Retailer pays a sales tax upon sale of the product to the Consumer. All three tiers pay various licensing fees.
     Direct Shipping seeks to eliminate tiers #1 and #2 from this chain, and to let Producers perform #3 themselves. Amongst marketing savants this process is called ‘disintermediation.’
     The concept is particularly practical when applied to wines costing more than $20 per bottle. Spirits, major-brand beers, and mass-produced inexpensive wines work just fine through TTDS. Those products seek consistency from bottle to bottle. They are produced in large quantities, and they attempt to influence consumers through widely disseminated advertising. Mass-produced products also account for way over 95% of the alcohol volume sold in America. Expensive, limited production wines are an entirely different story.
     Craftsman-level wines seek to emphasize taste differences from vineyard to vineyard, and from vintage to vintage. Hence they need to convey a much larger volume of information to consumers than do mass-produced alcoholic beverages. TTDS does not transmit information well. Much like the parlor game where a secret is whispered into a succession of ears, a Producer’s message is seriously diminished and mangled by the time it emerges from any TTDS chain. This ‘product story’ is an essential ingredient for craftsman-level wines. Producers need to communicate it directly to the end-user. Bottle and story need to arrive together.
     Of course the other perceived effect of disintermediation is a reduction in distribution chain cost. But because that cost is not a flat rate, but is traditionally calculated in the alcohol Trade as a percentage of some starting figure (i.e. the Distributor Price from the Producer gets marked-up a percentage by the Distributor, and that price in turn gets marked-up a percentage by the Retailer), it only becomes attractive enough to eliminate when it outweighs the more flat rate cost of physically delivering Goods directly to a Consumer. That desirability begins to manifest itself at some point between a retail store shelf price of $15 and $20 per bottle of wine. Let me demonstrate:
      On a bottle of wine retailing for $10, the Wholesale Price to the Local Retail Store is around $6.65, and the Winery price to the Distributor is around $5.00. The Winery could sell that same bottle directly to the Consumer at the Wholesale Price ($6.65), and pocket the $1.65 that otherwise would go to the Distributor, but the $3.35 savings to the Consumer would be meaningless if a $15 UPS charge were subsequently applied to deliver three bottles in a protective shipping carton.
      By contrast, on a bottle of wine retailing for $20, the Wholesale Price to the Local Retail Store is around $13.30, and the Winery price to the Distributor is around $10.00. The Winery can sell that wine directly to the Consumer at the Wholesale Price ($13.30), realizing a bump to Gross Revenue of $3.30, while the $6.70 per bottle savings to the Consumer more than compensates for $15 UPS charge on a delivery of three bottles.
      The Direct Shipment cost to the Consumer on three bottles of $10 wine would not be attractive compared to the TTDS price that Consumer would expect in a Retail Store. It would only make sense if the wine were not available in a Local Retail Store, and the wine were dramatically better than alternative wines the Consumer could find in a Local Retail Store. Remember, there’s no waiting period after a purchase in a Local Retail Store.
     Direct Shipping simply does not impact the vast majority of wine gallons sold in America! The price::benefit ratio of Direct shipping only starts to become desirable at something above a retail store shelf price of $15 per bottle. Above $20 per bottle it definitely starts to make sense. At $50 per bottle, serious cost savings are a reasonable expectation on the part of both Producer and Consumer. And while those bottles represent a large number of small, family Producers in America, those bottles are a miniscule percentage of the total wine volume sold throughout the country today.
     It costs small California wineries a considerable amount of hard-found capital to create a bottle sale in their tasting rooms. Clearly they should feel justified expecting the legal right to contact that purchaser a few months down the road to politely inquire, “Would you like to buy another one?”

Further Info on HR 5034

For more information on the cynical HR 5034, now pending before the U.S. Congress, see Stop HR 5034 on Facebook. Or view the Joint Letter sent recently to Congress from California’s Wine Institute, the U.S. Brewers, and the Distilled Spirits Council.

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