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Happy Birthday America

Wine brand creator, Consultant, Industry Analyst
 
 

You may be 250 years old, but the wine industry we know today is barely a fifth as old. Yes, Napa may have had more than 140 wineries by 1889, including surviving names such as Schramsberg, Beringer and Inglenook. And yes, there were at least 700 operating Californian wineries in 1919 when Prohibition was introduced. But only 30-75 had any kind of reputation for making quality wine, with another 100-150 or so arguably trying to do so.

In 1933, on Repeal, there were just 140 bonded wineries, a number that crawled up to 231 in 1966 when Robert Mondavi opened the first major new winery in Napa. A decade later, when the French tasters sat down to judge how California’s winemakers would fare against their counterparts in Bordeaux and Burgundy, there were 345.

Parisian steroids

The US victory at the Judgement of Paris in 1976 gave the industry a dose of steroids, and in 1980, there were over 500. Today, there are around 4,800. By my calculations, that means that a new Californian winery has opened roughly every four days over the last four and a half decades.

Fifty years ago, Napa winners such as Stag’s Leap SLV 1973 were described by Time magazine, as “rather expensive”, at $6 – the equivalent of $40 today. Good Napa Cabernet could be found for half that price. Even then, there were pricy outliers, however. Heitz Martha’s Vineyard bottles commanded $35 ($220 today) in 1975.

When the 1980 – one of the very first vintages - of Philippe de Rothschild’s and Robert Mondavi’s Opus One was released in 1984 at $50, it was, as Jancis Robinson reveals in her excellent (paywalled) FT piece – too expensive for restaurants, and had to be sold by the glass.

(This, incidentally, was a distribution method Robert Mondavi had already successfully pioneered for his Chardonnay).

Five times Opus One

As we headed towards the end of the century, that $50 price tag was at the bottom end of a price range that headed up to $80 and beyond. According to Food & Wine magazine, the cost of a bottle of Harlan rose from $65 for the 1990 vintage to $250 by 1999.

Twenty-five years on, we’ve seen ‘average’ Napa prices rise to $125-135, with entry level offerings at $50,  prestige estate ones at $200-600 and cult wines at $1,000-4,000. But, more recently, we’ve also seen them fall back as wineries find themselves with unsold stock. Today, bargain-hunters can find high-quality Napa Cabs in Trader Joe’s, selling under the chain’s own label at $ 10- $ 20.

Blame the grapegrower

When you ask Californians why Napa prices in particular, have risen as high as they have, you’ll be told it’s because of the cost of the grapes. Indeed,one grower calculates the price of some of his according to the retail price of the wine they’ll be used to produce.

But, of course, this is a circular argument that cannot last forever. Last year, Napa grapes went unpicked. Everything depends on the size of this year’s crop, but most expectations are that grape prices in all but the best sites, will fall.

WHO's the boogeyman?

The craziness of bottles of fermented grape juice being sold for hundreds of dollars, sits alongside another strand of irrationality: the fear of a return to full-scale Prohibition, driven by World Health Organisation cancer warnings. Of course, no outsider can or should lecture you on laws that might be passed by the current or a subsequent administration, especially when one sees what has happened in your country in recent months. And, of course, unlike other nations, you’ve actually lived through 14 years of a self-imposed total ban on alcohol; why should a repeat be any less likely than legislation to limit firearm ownership?

What I have to say in this birthday message – as a friend – is that the price of Napa wine, and Prohibition hysteria are just two of the things those of us who care about you struggle to understand. We also never got the idea of Cupcake or Little Black Dress as wine brands, and we have yet to embrace Stella Rosa’s Mango-and-Chilli-flavoured Muscat, or XXL’s 16% versions, but we may get there.

No wine please. We're American

If we raise our Old World, un-American eyebrows at innovative iterations like these, we shake our heads at how a US wine industry with the imagination and dynamism to create them has failed to persuade more Americans to drink wine.

Sales have only risen over the last 40 years because there are more Americans; not because wine has become a widely popular drink, as it has in the UK, for example. Less than 30% of your citizens now drink wine. Is it any wonder that you are so worried about vinous disaffection among the young.

Get the teenagers to drink wine

But, when you talk about them – as you do quite often – it’s generally in the context of Gen Z. “We need to get Gen Z drinking wine” we hear you say. But Gen Z are aged from 14-29 and, in a country where serving wine to a man or woman a few days short of their 21st birthday could land a bartender in jail, it’s hard to see why this cohort is obsessing you as much as it is.

Less weight; less wine

Shouldn’t you be worrying about the 30 million Americans who, according to JP Morgan will be on GLP-1 treatment by 2030, up from today’s roughly 20 million. These aren’t teenagers and young adults who’ve yet to ‘discover’ wine; they’re mature citizens who are quite possibly currently among the minority who drink it today and are very likely to slash their consumption.

Sleep deprived

Shouldn’t you also be worrying about the non-obese millennials and Gen Xs who are already cutting back on all kinds of alcohol because of its perceived effects on their sleep patterns?

Other countries will have to deal with these phenomena too, but the volatility of your populace, and the power of social media and powerful opinion formers may make the challenges greater on your side of the Atlantic. (We haven't forgotten how heated arguments became over Covid masks and vaccinations)

No more tariffs

When talking about volatility, please could you stop the man you twice chose to lead your country from threatening – and actually applying - tariffs – on a whim. We love having you as friends and customers, but let’s face it, there are going to be times when we find it easier to deal with more stable customers elsewhere.

Finally, let’s get back to price. Not the unaffordable cost of Napa Cab that we’ve already discussed, but the $15-18, plus tax, plus tip, glasses of basic California or imported Chardonnay that have become normalised across your nation.

When an ordinary drink like this costs the same as a cocktail prepared using the customer’s choice of spirit, to their taste, and quite possibly with a bit of theatre, is it any surprise that wine is not seen as a particularly attractive option. There are reasons why an equivalent or possibly better glass of wine in Europe might cost less than half the price of one in the US, but unless and until you address the problem, don’t be surprised to see consumption  continue to fall.

If you’ve taken the time to read to the end of this well-meaning birthday message, thank you for doing so. Now please go and celebrate your birthday with at least a glass or two of decent wine.

To the next 250 years!

 

 IWS is happy and honored to celebrate to-day America's 250 years with the words of Robert Joseph, as a great occasion to remember its wine and the growth of its indutry.  Thank you Robert, we are happy and honored too! Giancarlo Panarella