The economics of wine
Blog: Winemaker's Journal
February 2, 2012
For the past week I've been reading Mike Veseth's recent book, "Wine Wars." I interviewed Veseth for a recent article I wrote about growing competition in the local wine industry. He was gracious enough to send me a review copy of his book.
Veseth is a wine economist at the University of Puget Sound. He teaches classes there, writes book as well as an excellent wine blog — wineeconomist.com. He also drinks a lot of wine. "Wine Wars," published last year, is a compilation of many of the columns from his blog.
But the book doesn't read like a bunch of separate blogs nor anything you'd expect from an economist. It's spritely written, easy to read and full of information about the history and growth of the global wine industry.
A frequent visitor to the Wenatchee Valley, Veseth includes stories about two of his favorite local wineries, Fielding Hills, owned by Mike and Karen Wade, and Rob Newsom's Boudreaux Cellars.
Veseth writes how wine in only recent years has finally found its place on U.S. dinner tables, while Europeans have washed down their meals with wine for centuries.
As U.S. wine consumption has increased — more than doubled since the 1960s, to about a case of wine per person per year — so has U.S. produced wine, especially in California and Washington, where some of the world's best wines are now being made.
While dozens of fine new wineries start up in the U.S. each week and hundreds of wines can now be found on the wine wall of every large grocery store, Veseth worries that most wine drinkers never get past the few McWine makers that rule the industry.
Mega wine producers like Gallo, Constellation Brands, Bronco and The Wine Group own hundreds of popular wine labels, from the cheapest to some of the best, and are responsible for most of the wine sold in the world today.
McWine, best realized perhaps by Charles Shaw wines, aka, Two-Buck Chuck, is the thread Veseth uses to weave together his overview of a complicated industry.
Made by Bronco Wine Co., Charles Shaw is only sold at Trader Joe's, the upscale, limited-selection stores owned by Aldi, Germany's leading wine merchant. There are several Trader Joe's in the Seattle area, but none here, yet.
Trader Joe's sells the wines, reds or whites, for $2 a bottle, hence the nickname. Bronco makes millions of gallons of the wines from Central California-grown grapes. They're simple, cheap, drinkable wines that, due to the low price, have opened the wine cellar door to thousands of new consumers. Other big wine companies have followed the mold and are selling similar low priced wines everywhere.
Veseth worries by raising the quality of the cheapest wines, Two-Buck Chuck may also be lowering the quality of products from other large wineries racing to match Bronco's success with huge supplies of characterless wine to be consumed by people who want a change from pop and light beer.
He pins his hopes on winemakers he calls terroirists — those who care about the idea that wine should embody the unique tastes, aromas and characters of the place where it was made and the winemakers themselves.
He believes many of those new wine drinkers will eventually graduate from lower priced bulk wines to higher priced hand-crafted local wines. Hopefully enough to support a rich and diverse market of wines for every occasion.
"Wine Wars" can be found or ordered through local book stores and through Amazon in hardback or Kindle editions.