Wine economics

Sunday, December 21, 2008

Electricity improved wine: News or old hat?

Last week a "news hog" was dricen through the media: Improving wine by means of an electric current. Among other media the New Scientist wrote:

How to make cheap wine taste like a fine vintage

"Researchers at the South China University of Technology in Guangzhou
treated wine with fields of different strengths for different periods of
time. ... The results were striking. With the gentlest treatment, the harsh,
astringent wine grew softer. ...."

Jim Lapsley of UC Davis commented the news with:

Dear All,

This is fairly old news, although interesting that the Chinese are trying it.
During wine aging various oxidative reactions occur (slowly), as well as increased tannin polymerization, which reduces the perception of astringency as the new (larger) molecules no longer fit in the tongue receptors that signal "bitter" and don't react with proteins in the same way.

Almost any method that will put energy into the system will speed these reactions. In the past heat has been tried, radio and micro waves, electricity in other forms, and radiation. (About 20 years ago University Extension and Food Science hosted a conference on food irradiation--"ion kissed"--and Manuel Lagunas-Solar irradiated some wine for the banquet. It did reduce tannin, but also gave a cooked taste to the wine).

All these methods will speed aging, but they also lead to excessive oxidation and loss of wine complexity and aroma.

I leave it to you economists: If a method that could increase the value of the wine more than the cost of the treatment existed, wouldn't it be in use?

Anyway, old news.

Jim

Friday, September 19, 2008

Aldi and the miracle of the loaves and fish

Some readers of this blog will remember from their early days in bible school the miracle of the loaves and the fish: Jesus was preaching in the desert to five thousand people - not counting the women and children. Came lunchtime, there were only five loaves of bread and two fish - not enough to feed the crowd. Through some undisclosed and irreproducible technology (~ miracle) the loaves and the fish were multiplied, all feasted on fish and chips, and after lunch twelve baskets full of leftovers were collected.

The Gospels are mute about what the people had been given to drink to wash down their fish and chips. If Aldi Sued, the southern sibling of Germany's twin discounter chains, and its suppliers had been around at the time, it might easily have been a 2004 Rosso Piceno Superiore DOC "Naumachos", a wine that received two glasses - "due bicchieri" - from "Gambero Rosso", an Italian equivalent to Robert Parker, of sorts. At one time, when the wine cost 9.80 € the bottle retail, the wine maker claimed to have only 4,000 bottles left. But suddenly Aldi Sued had 50,000 bottles on offer at 6,99 € a bottle. What a miracle – physical as well as economic!


The miracle has been demystified by the German Frankfurter Allgemeine online service "FAZ.Net" on Sept. 16th, 2008. Giovanni Carminucci of Grottamare, Italy, the winemaker of the "Naumachos", was approached early in 2008 by Rino Frattesi of Essen, Germany. Frattesi is the owner of "La Grappa", an Italian restaurant which boasts a 1,000-items wine list ranging from a 1961 Chateaux Petrus for 8,000 € the bottle down to a 18 € Pignocco Verdicchio. The restaurant proudly advertises it having been recognized by Vinitaly in 2005 as the restaurant with the best wine list in the world.

Whatever such awards may be worth, Fratessi apparently knows something about wine. But running the restaurant and maintaining its exquisite wine list does not exhaust Fratessi. He also supplies large retail chains with "Aktionsware", i.e. goods for special sales, and it was in this incarnation that he approached Carminucci asking him for 50,000 bottles "Naumachos". Carminucci agreed, bottled whatever wine he had on hand, labeled it the same way as the original "Naumachos", including the "due bichieri", and shipped. Fratteri passed the consignment on to Aldi Sued at € 3.50 the bottle. Aldi Sued had the wine tested by "caveCo", an accredited wine sensoric analysis laboratory at Essen, headed by Markus Del Monego. The 1998 sommelier world champion was not fooled, rated the wine as "recommended" with 13.75 of 20 points (I don't know the lower end of the Del Markus scale.) The points are, according to FAZ, less than a "un bicchiere" from Gambero Rosso. That did not deter Aldi Sued from offering the wine as a "due bicheri" bargain. Miraculously, the Aldi-website announcing the sale of the "Naumachos" was no longer accessible when I checked on Sept. 18th, 2008, two days after FAZ.Net broke the story; the website was back on Sept 19th, 2008 .


Many wine lovers' likely reaction to this story is a jaded "What else is new?" In honesty ratings the wine trade has always competed with the horse trade for pride of place. In a way the jaded wine lovers are right. In spite of all the hype about trusted supply chains, the rabbit-like multiplication of accredited quality experts, mushrooming private ranking schemes, and strict labeling regulations imposed by government, the actors in the wine chains are just normal merchants, people "... engaged in a commercial pursuit. A commercial pursuit is one in which the thing pursued is a dollar." (Bierce, A. 1958. The devil's dictionary. Dover Publications). The miraculous multiplication of the "Naumachos" has helped to remind us of this simple fact. If it also contributes towards immunizing us against the quality assurance and trust hype, the affair has served some good purpose after all.

RAEM

Sunday, July 27, 2008

Jancis Robinson & German dry wines

Jancis Robinson has good things to say on her blog about German dry wines.

She also provides a list of recommended dry-wine wineries. Most are from the Pfalz, Mosel, Nahe, and Rheinhessen regions. Rheingau, Baden and Wuerttemberg are not on the list.

RAEM

Friday, April 25, 2008

Wine Business International

Riesling apparently continues its remarkable expert market performance. RAEM

http://wine-business-international.com/News_Riesling_renaissance_continues_unabated.html

Tuesday, December 11, 2007

Social Wine Network

Building Facebook for Wine: Wine enthusiasts are creating social-networking sites for fellow oenophiles, and they're doing more than just selling bottles, John Tozzi reports in Business Week, 07-12-10.

RAEM

Saturday, December 08, 2007

Are the Aussies going the way of the French?

For a long time the French thought that there was no other red wine than French reds. Then came the Californians and Australians and the French got clobbered in the supermarkets, particularly in England.

Now Tesco tells the Australian winemakers to shape up. The reaction of some Australian winemakers is less than polite. Perhaps the Aussies have developed wine hubris more quickly than the French.
RAEM

Tuesday, October 02, 2007

The Ashenfelter vs Parker bout

Yesterday I started reading Ian Ayres' (2007) "Super cruncher". Ayres - he is an econometrician at Yale's law and management schools - starts his book with a 6-page account of the ruckus that Orley Ashenfelter of Princeton University caused in the late 80s with his price prediction formula for Bordeaux wines. For obvious reason, Robert Parker, the king of the "swishing and spitting" approach to wine appreciation, was not amused. I think Ashenfelter won the argument and Parker the money. It is a nice yarn.

The magic formula, as reported by Ayres, is:

Wine quality = 12.145 + 0.00117 winter rainfall
+ 0.0614 average growing season temperature
- 0.00386 harvest rainfall

Most people would probably agree that winter rainfall, growing season temp., and rain at harvest time would affect wine quality and prices. But Ashenfelter estimated the relationship using data from about 30 vintages. Based on this equation, Ashenfelter then estimated the wines' like future price.

A quick check with Google led me to two websites at Princeton that are relevant:
"First crush the grapes, then crunch the numbers".
Princeton economist judges wine by the numbers

RAEM

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