In addition to Portugal as a “Plan B” backup supplier of wine, the British also developed close ties with Spain. Ever since 1587, when Sir Francis Drake “singed the King of Spain’s beard” by stealing three thousand barrels of Sherry (or the equivalent of one million bottles) from the port of Cadiz, the English have been inordinately fond of Sherry, or “sac,” as Shakespeare refers to it. In the nineteenth century, nearly 50 percent of the wine consumed in England was Sherry. Once again, as in Bordeaux and Oporto, the English merchants moved to Jerez in Southern Spain to keep an eye on business, and the names of their descendants can still be seen in any list of modern Spanish wine merchants: Garvey, Duff-Gordon, Wisdom & Warter, Byass, Harveys, Osborne, Sandman, Williams & Humbert. Even the quintessentially Spanish sounding Sherry, Tio Pepe, was originally founded by an Irish merchant called Murphy.
Indeed, wherever good wine is made, there turns out to be a British connection. In 1773, an Englishman named John Woodhouse decided that the decent local wine of Sicily could be improved by using the Solera process, and thus invented the powerful sweet wines of Marsala. It was another Englishman, Dr. James Busby, who first brought cuttings of the Syrah vine to Australia in 1832, and thus fathered the worldwide craze for Australian Shiraz. Despite French claims to the contrary, it was the English, not Dom Pérignon, who invented Champagne. In 1662, almost forty years before the monk reputedly claimed, “I am drinking stars,” an English scientist, Christopher Merret, presented an eight page paper at London’s Royal Society, in which he detailed what is now called méthode Champenoise, the secondary fermentation that makes wine “brisk and sparkling.”
Even Argentina’s most famous and prolific wine region has a British origin. In 1895, an English railway engineer, Edward James Palmer Norton, founded Bodega Norton, the very first winery in Mendoza Province. Thanks to the vision of this Englishman, Mendoza became the heart of the Argentinian wine industry and the fifth largest wine region in the world. As recently as 2007, Bodega Norton alone was exporting 1.5 million cases of Malbec wines annually. Even the world-famous Marlborough Sauvignon Blanc wines of New Zealand did not receive international recognition until they won the Sunday Times competition in London and were placed on the shelves of English supermarkets. And of course, one of the most momentous and significant events in the history of modern wine, the 1976 Judgment of Paris, was organized by Stephen Spurrier, an Englishman.
And in the twenty-first century, the British domination of the international wine trade is stronger than ever. The center of the world’s wine trade is not Bordeaux or Paris, not San Francisco or New York; it is Delamare Road, Cheshunt in Hertfordshire, a small village halfway between Potters Bar and Epping, a few miles north of London. Tesco House on Delamare Road is the world headquarters of Tesco, the world’s biggest retailer of wine.
Perhaps the main explanation for the unparalleled influence of the English on the world of wine lies in the fact that the English, with minor exceptions, grow none of their own. As far back as 1760, an English Cellar Record Book that was a bestseller in London had specific sections devoted to Burgundy, Champagne, Claret, Madeira, Port, Rhenish, and Sack (Sherry). While the French King and his aristocracy had their own vast cellars, these would have been stocked almost exclusively with French wine. The English alone had such eclectic tastes that were limited to no specific producer, and the winemakers of France, Spain, Portugal, and Germany were all only too anxious to satisfy those tastes.
Because the English produce no significant wine of their own, all wine has to be imported. The English actually drink only 5 percent of the world’s wine, but they import 17 percent of all the wine that is traded globally. The United Kingdom accounts for 20 percent of all money spent on wine in international markets, more than any other nation. Of every six bottles that ships around the world, one will end up on a supermarket shelf in England—usually a Tesco shelf. There are other big wine retailers in the UK, of course, such as Sainsbury’s and Waitrose, for example, but Tesco is bigger—selling 320 million bottles of wine per year in England alone. Tesco is actually the biggest wine retailer in the world, operating 3,700 stores in fourteen countries in 2009. Sourcing its wine from producers all over the world, shipping it across the globe in vast containers, retailing the wine—often under its own Tesco brand label—in fourteen different countries, but most especially in England, means that the English market and English tastes continue to drive the international market for wine.
Wine in the Twenty-First Century
In the forty years since the Paris tasting of 1976, the world of wine has changed dramatically. No longer centered on France, the wine industry has become truly global. The average supermarket in America or England, for example, has a daunting Wall of Wine offering a choice of perhaps one thousand different bottles of wine from at least a dozen different countries. In my local store in South Florida, Sauvignon Blancs from their traditional home of Pouilly Fumé in the Loire Valley now compete with bottles from New Zealand’s Wairau Valley, and Pinot Noirs from Burgundy’s Côté de Nuits compete with Pinots from Oregon’s Willamette Valley.
Partly to protect the consumer, partly to protect the reputation of the producer, and partly to promote wine exports, national and international rules and standards have eroded some local differences in wine, and in other ways emphasized those differences. Following the leads of Bordeaux and Burgundy, the French government introduced a wine classification for the whole country in 1935. In order to carry the AOC (Appellation d’Origin Controlée) designation on its label, the wine must be certified to have fulfilled certain conditions—primarily where it was grown and made. (See the chapter on France for more details.) As Italy, Spain, Portugal, and Germany all came together to form the European Union during the 1970s, each of the countries were obliged to introduce similar laws, dividing each country into individual wine regions and subregions which needed to be specified on the label.
Globalization: No longer designed to appeal just to a local taste, wines must increasingly satisfy a more universal standard dictated by wine critics like Robert Parker or Jancis Robinson, and magazines such as Decanter in the UK and The Wine Spectator in the USA. While boutique wineries still exist—and it’s possible to find winemakers with their own unique taste and style—most of the world’s wine is produced by a handful of huge international conglomerates that ship it around the world in standard twenty-four-foot shipping containers, holding twenty-four thousand liter disposable plastic bladders, and bottle it on arrival. The world of wine is not controlled by elite cabals in Bordeaux and Beaune, nor by Christies and Sotheby auction houses in Paris or New York. These days, the big decisions concerning the future of wine are being made on 999 Lake Drive, Issaquah, WA, and on Delamare Road, Cheshunt, just outside London—the respective head offices of Costco and Tesco, the world’s two largest wine merchants.
Figure 3: World’s top wine import and export nations
The following list from BKWine Magazine (www.bkwine.com) shows the world’s top ten wine-exporting countries in 2013:
France: $10,441,798,000 (30.2% of total wine exports)
Italy: $6,696,378,000 (19.4%)
Spain: $3,429,986,000 (9.9%)
Chile: $1,889,985,000 (5.5%)
Australia: $1,779,479,000 (5.2%)
United States: $1,559,484,000 (4.5%)
Germany: $1,345,842,000 (3.9%)
New Zealand: $1,021,198,000 (3.0%)
Portugal: $962,321,000 (2.8%)
Argentina: $887,227,000 (2.6%)
The following list from BKWine Magazine shows the world’s top ten wine-importing countries in 2012:
United Kingdom, 3,944 Million €uros
USA, 3,938 M €
Germany, 2,393 M €
Canada, 1,540 M €
China, 1,229 M €
Japan, 1,225 M €
Belgium, 964 M €
Switzerland, 925 M €
Netherlands, 872 M €
Russia, 817 M €
The US wine market is one of the fastest growing markets in the world, both in terms of production and consumption. It has expanded rapidly over the past few years on the back of increased consumption, government support, online wine purchasing, and a growing young population.
On the other hand, wine consumption is falling in all the traditional wine-producing countries. Over the past thirty years, water quality has improved dramatically throughout most of the Western world, and is now safe to drink even in remote and rural areas. With stricter drinking and driving laws, increased expectations of efficiency in the workplace, and a decline in the café or pub as a center for social life, wine is no longer the daily general beverage. Young people in countries such as Argentina, Spain, Italy, and France are switching to trendy cocktails, recreational drugs, or simple sodas instead of wine. In Italy, for example, in the final fifty years of the twentieth century, per capita wine consumption has dropped 45 percent from twenty-nine gallons to fifteen. In France, over the same period, the drop is even more extreme, from forty gallons to just sixteen—a decline of 60 percent. In Germany, wine consumption has dropped by a quarter, and in Spain and Portugal, it has gone down by a third. It should be noted, however, that the decline is limited to the cheap, poor-quality wines, which, perhaps as a consequence, are vanishing from the market. Over the past thirty or forty years, Europeans might be drinking less wine, but they are drinking better wine; while Americans who seldom drank any wine thirty years ago are now consuming more wine than any other nation.
UK wine consumption has increased by 500 percent since 1970, and the US wine market will continue growing at a rapid pace in coming years. Although the UK imports more wine, the US now consumes more wine, even surpassing France. In terms of value, the US wine market achieved a value of around $33.5 billion with 871 million gallons of wine sales in 2013. The economic recession had little impact on the US wine industry, as consumers started enjoying low-priced bottles and wines by the glass.
Wine Prices: In my wine classes, students are encouraged to ask questions and discuss everything about the wine we are tasting, except for its price. We never discuss price. Experience has taught me that if I say we are about to drink an expensive, $75 bottle of wine, half the class will like it, even before they taste it, just because it is expensive. The other half will either dislike it or be disappointed because it is over-priced. As explained in Mike Veseth’s wonderful book Money, Taste, and Wine, the very concept of the price of wine physically affects how we respond to it. Veseth refers to a 2008 study by Antoine Rangel of CalTech, in which the test subjects tasted wine while their brains were scanned with an MRI. When they were told that the wine they were about to taste was expensive, those parts of the brain associated with pleasure lit up in anticipation. He also quotes many other studies, which show that in blind tastings, most people cannot tell the difference between expensive and cheap wines, and indeed very often prefer the cheaper one.
The following table shows the typical breakdown of a bottle of Californian wine retailing in Florida at $20 per bottle. These are rough but typical numbers based on fairly common assumptions. Most wineries work on a 50 percent gross margin, meaning they sell their wine for double the cost of goods. There is a traditional 1 percent rule of thumb that the retail price of a bottle of wine is 1 percent of the cost of a ton of grapes. So wine made from grapes that cost $2,000 per ton will retail at $20 per bottle. Since the repeal of Prohibition, the US has “enjoyed” a three-tier system of distribution, which means that the wine producer and the wine consumer are separated by the distributor and the retailer. Most distributors work on a 28-30 percent margin of their sell-price, and most distributors work on a 30-35 percent margin. As shown here, a bottle of wine which the winery sells for $10 per bottle will eventually retail for $20.
Retail cost of US wine, analysis
Bottle
Case
Cost of grapes
($2,000 per ton and 60 cases per ton)
$2.78
$33.33
Cost of oak & fermenting
$0.64
$7.67
Cost of packaging & bottling
$1.17
$14.00
Total Cost of Goods
$4.58
$55.00
Winery amin/mktng/profit
$4.58
$55.00
Wholesale price by winery
$9.17
$110.00
FOB costs and taxes
$0.48
$5.76
Cost for distributor
$9.65
$115.76
Distributor’s 28% of sell price
$3.75
$45.04
Cost for retailer
$13.40
$160.80
Retailer’s 33% of sell price
$6.60
$79.20
Final retail cost
$20.00
$240.00
Figure 4: US Wine Sales by Retail Price
In 2016, US wine sales by retail bottle price were as follows, noted by Statista (www.statista.com):
$25 & above
4.8%
$20 - 24.99
4.0%
$15 - $19.99
8.5%
$11 - $14.99
18.7%
$8 - $10.99
27.3%
$4 - $7.99
30.1%
Less than $4
6.4%
I’ve observed in my local supermarket, which offers a selection of perhaps one thousand different wines, that the bottles in the $8 to $15 range are shelved at eye level where most people can find them, while the more expensive bottles are placed on the higher shelves and the cheaper selections are all on the lower shelves. Retailers recognize that most people shop for wine primarily by price category, rather than terroir or varietal. If you don’t find what you were looking for initially, you can reach up for something better; or you can bend down for something less. In a 2012 paper presented to the American Association of Wine Economists, Dr. Elliot R. Morse quoted from a survey of six thousand blind tastings to argue that most people do not appreciate expensive wines: “Individuals who are unaware of the price do not derive more enjoyment from more expensive wine. …we find that the correlation between price and overall rating is small and negative, suggesting that individuals on average enjoy more expensive wines slightly less.” He went on to say that “Lecocq and Visser analyzed data from three data sets totaling 1387 observations on French Bordeaux’s and Burgundies. They report similar findings: ‘When non-experts blind-taste cheap and expensive wines they typically tend to prefer the cheaper ones.’”
Wine Today: Many people complain that we have created a world of “McWine” which has lost its individuality and local identity; the reds have less tannin and the whites less acid. To a certain extent this is tr
ue; although wine connoisseurs can still identify a Château Latour from a Château Lafite, I doubt that many could tell the difference between a selection of regular Cabernet Sauvignons from Australia, Chile, or California.
But most people have never been able to afford to drink a glass of Château Lafite or Château Latour. The wines that most people could afford, four hundred years ago or forty or even fourteen years ago were actually not very good; the selection was limited and the quality was poor. On the other hand, the expensive wines were not so impossibly out of reach. When I lived in France during the 1970s as a struggling writer and painter, I was by no means wealthy, but for special occasions, I remember buying a Cheval Blanc from Saint-Émilion, and I remember buying my father a Château Latour for his birthday. These were certainly extravagant gestures, and, I’m guessing, the equivalent of $40 or $50 in today’s money. But these days, prices for these top wines have become impossible for ordinary folk, even as extravagant gestures. It’s hard to find either of the two wines I mentioned for much less than $1,000 per bottle. (A single bottle of 1947 Cheval Blanc recently sold for more than $30,000.) However, while the price of the great wines has exploded through the roof, the price of decent wines has descended equally dramatically.
Today we live in a wine drinker’s paradise; not only do we have a geographic selection that could not be imagined a couple of decades ago, but we also have consistently decent quality at affordable prices. Poor quality wine no longer sells, and people who make bad wine soon go out of business. The average person today has access to a wide selection of modestly priced and well-made wines from all over the world. Some purists complain that wine has become just another consumer commodity.
The Booklovers' Guide to Wine Page 12
