Thursday, January 26, 2017

Book review: But First, Champagne

When David White's But First, Champagne (Skyhorse Publishing, 2016) was first announced, I did not have a pressing desire to acquire it. I know David tangentially through his blog and have always associated him (rightly or wrongly) with terroir issues. I have myself done a fair amount of writing on Champagne on this blog and felt that I knew all of the leading Champagne writers; and he was not among them.


Eventually I did get a copy of the book and decided to read it. I initially approached it with hands crossed over my chest (believe me, it is tough to turn pages from that position) but began to lean forward after just a few pages.

This book is broken into two parts: a fast-paced, easy-reading history of Champagne -- that is at once informative and entertaining -- followed by a guide of the major Champagne producers and the four sub-regions.

In the first part of the book, David does for Champagne what Paul Lukacs did for wine (Inventing Wine) but in a less-ponderous, less-"gappy" (terroir debate, Algerian wine industry, for example) manner. And his treatment does not only cover the beverage; it covers major world events as they unfolded and their impacts on Champagne (both the drink and the region).

The section is peppered with sidebars that provide insight into the topic at hand but does not fit smoothly into the flow of the storytelling. I have seen this mechanism applied previously but never with this degree of timing and level of effectiveness. Topics such as "Champagnes Many Styles", "How Champagne is Made," and many others are perfectly placed throughout the text, with some relevance to the historical piece being treated, and are quick enough reads as to not meaningfully distract the reader from the thread. Rather, they are enhancements.

The wine-guide portion of the book treats the major houses in great detail and is also rich in sidebars which provide information such as leading producers, quick facts, sub-regions, and other tidbits.

This work is extensively researched and well-presented. The cover art is spectacular, with gold type on black speaking to the richness and elegance of the subject. The book is unencumbered by detailed discussions of viticulture and viniculture of the region but will be enjoyed by the Champagne neophyte and expert alike. Such is the quality of the writing style and the completeness of the treatment of the topics which the author does choose to take on.


©Wine -- Mise en abyme

Wednesday, January 25, 2017

Winelover Winery Visits Task Force Report: The Site Visit

Previous posts in this series have described the Formulation of the Winery Visits Task Force and the Winelover Preparation for the Winery Visit. Todays post deals with the mechanics of the visit and the types of data to be collected therein.

The objective of any site visit should be to come away with as clear an understanding as possible as to: (i) the wines that are being produced at the establishment; (ii) the quality of the wines produced therein; and (iii) why the specific quality levels. In order to arrive at this level of understanding it is my opinion that data need to be collected in a systematic manner so that the various elements can be placed in proper sequence and weighed both against each other and the data collector’s experiences. I will expound on these thoughts in the following sections but first some preliminary material.

Day of the Visit
The following are considerations for the visiting Winelover:
  • It is possible that the visit will include both vineyard and winery tours in addition to tastings. The Winelover should dress accordingly, with special care taken to wear comfortable shoes.
  • The Winelover should refrain from consuming products beforehand that could compromise his/her ability to properly taste and evaluate the wine.
  • The Winelover should ensure that he/she is on time for the appointment.
  • The Winelover should courteously, but confidently, introduce him/herself to the person conducting the tour and should have a business card to present to said person. It is appropriate to ask for a reciprocal business card at that time.
  • Listen carefully to any instructions given and adhere to them during the course of the visit. You do not want to be the “smartass” in the group. A negative perception of an individual or the group by the tour leader could crimp the flow of relevant information.
  • If you are planning on using voice or video recorders please inform the tour guide and ensure that he/she is ok with that.
Data Collection
The blocks of data that need to be collected in order to gain a full appreciation for what the winemaker is doing at the estate are shown in the figure below. 



These blocks of data are best collected in the order listed. The Winelover does not have to ask every question in order to guide this flow but should be prepared to intervene to put the conversation back onto this path if it begins to stray. In addition, the winelover needs to get a perspective on the estate’s overarching philosophy and that data collection will be threaded throughout the entire effort. 

Some of this data may have been collected and curated prior to the visit (as described in Winelover Preparation for the Winery Visit) and should be validated during the interaction with winery staff.

Philosophy
This area examines the principles which guide the winemaker’s actions. There is no right answer here but the answer provides a sense of the school of winemaking that he/she pursues and why. It gives a sense of what the terroir provides and how the winemaker seeks to exploit that. This will generally be a free-form discussion and the Winelover should attempt to capture as much of this dialogue as he/she can.

Viticulture
Quality grapes are a precursor of quality wine and the science of viticulture has developed and evolved with a single goal in mind: the delivery of high-quality wine grapes to the winery.  The quality of wine grapes produced in a specific harvest is not only a function of that year's harvest conditions; rather, it is the result of a combination of factors which, together, represent the full scope of viticultural science.  The data elements that need to be collected in this space are shown in the figure below.
                                                   

Viniculture
The figure below is a graphical depiction of the wine production process with some extensions that are specific to the Clark Smith Post-modernwinemaking schema. As stated in his book, postmodern winemaking does not seek to throw out all elements of modernity and replace them lock, stock, and barrel with a new canon. Rather, postmodern winemaking uses existing pieces where appropriate and substitutes as necessary. The key extensions of postmodern winemaking are shown in the box in the top-right labeled Postmodern Toolkit. If a Winelover encounters a winemaker who practices postmodern winemaking, these extensions should be explored.


The subject of granularity of data collection needs to be considered by the Winelover. The leftmost column in the figure below shows the highest level of data that will be captured. Data at this level can be collected during a dialogue with the winery team. As you move to the right in the table, the data becomes more granular and will require some effort on the part of the winery to come up with answers. If data of this granularity is required, they should be collected via pre- or post-visit questionnaires.



Wine Tasting
After the tour of the vineyard and production facilities, the practice is for the winemaker to take the group into the tasting room to sample some of the output (Some of this tasting may have occurred in the cellar as a tasting of barrel samples). I have developed a mechanism for assessing a wine which takes into account a number of intrinsic and extrinsic factors of quality. For our purposes, the intrinsic factors (what is in the glass) would be an appropriate data set. The model is shown below with the intrinsic factors in the right column.


A crib sheet of wine descriptors is provided below.


Lettie Teague, writing in the Wall Street Journal (http://www.wsj.com/articles/a-winery-tasting-room-guide-to-sipping-and-spitting-1401469556) stipulates that “… all wine professionals spit out their wine religiously – and everyone who is tasting wine should … “ and we recommend that #Winelovers adhere to this principle when visiting our winery partners. Depending on the breadth of the winery portfolio, a not-insubstantial amount of alcohol may be provided to the Winelover at the tasting. Swallowing that much wine may result in inebriation which could lead to shoddy assessment of the wines presented or (horror of horrors) visible signs of intoxication.

At the conclusion of the visit, the winery team should be thanked for their hospitality and the member responsible for dealing with follow-up questions identified.

Next Steps
The next steps in the process are assessment of the collected data, filling in any gaps, and preparing the report. That process will be covered in Sharon Parsons upcoming post.

©Wine -- Mise en abyme

Tuesday, January 24, 2017

Winelover preparation for the winery visit -- guest post by Olga Mosina

In yesterday's post, I detailed the driving forces behind the creation of the Winelover Winery Visits Task Force, selection of the Task Force members, and the approach taken to accomplish the objectives. Since publication of that post I have been engaged in encouraging discussions which have led to the "unscrubbing" of the document and inclusion of recommendations targeted at the institutional winelover level.

As promised, today's post is Olga Mosina's writings on preparation for the winery visit.

Assumptions
a.    A winery hosting a group of winelovers is looking to increase media coverage and social media buzz as well as to acquire new ‘brand ambassadors,’ all of which will ultimately help to increase its brand recognition and sales.
b.    There are different reasons why a winelover chooses to go on a trip:
-    to get educated about the specific region and its wines;
-    (and, but not necessarily) to use this newly acquired knowledge to produce content;
-    (and) to increase his/her audience;
-    to meet like-minded people;
-    to network;
-    to have fun.
c.     The Winelover community has done a good job facilitating the above and now wants to increase the quantity and quality of the content its members produce and the audience for this content.
Suggested Pre-Trip Steps 
By signing up for a trip, every winelover already has an answer to the basic question: “Why am I taking time from my busy schedule and investing money to visit this particular region (instead of buying the wine in a store)?”

1. The Winelover community can formalize this step by actively encouraging/asking people to publicly reflect on why they are choosing to go on a trip. These answers/reflections can take one of many forms:
  • a pre-trip blog post/article
    • topics may include: wine grapes, styles of wines, famous wineries or personalities, history, etc., of the trip region;
  • a Facebook post (if the winelover does not have enough content for a full-fledged post/article);
  • a collection of photos;
  • a short video or audio;
  • other creative content.
2. The Winelover community should create a mechanism to gather and disseminate this content prior to the trip; for example, by featuring the best posts on its web-site and sharing the best content on social media. By doing so, the Winelover community will:
  • encourage participants to think about the trip ahead of time and do some research;
  • motivate people to create content by providing an opportunity for them to increase their audience prior to the trip;
  • encourage content creation by sharing high-quality examples;
  • make everyone better prepared for the trip by reading/viewing/commenting on other people’s content;
  • connect the participants of the upcoming trip;
  • create enthusiasm and a sense of anticipation prior to the trip;
  • improve winery preparation for the trip
    •  they will know who will be coming on the trip and what interests/questions they may have;
  • create buzz about the winery ahead of the visit;
  • make it easier to track content.
3. Research completed prior to the trip will help participants to stay more focused, ask specific questions, and collect better data during the trip. At the same time, no topics, creative styles, or research methods are being forced upon participants.

4. Creation of pre-trip content will make participants more likely to create post-trip content (either a follow-up on their earlier thoughts or something completely different).

Additional thoughts
If it becomes clear from pre-trip content that there are some specific interests in the groups, the trip can perhaps be tweaked to adapt to these interests. For example, if several people are interested in local food that goes with wine, or local wine tourism, or a specific style of wineries, some parallel visits can be arranged to accommodate these interests. 

Organizers of Winelover trips may choose to consider pre- and post-trip content as an essential part of the application process for future trips. This creates a simple rule for applicants: in order to be considered as a participant on the trip, one needs to submit content from (a) previous trip(s). 

Next Steps
The next step in the process is the actual winery visit. Winelover activities during this phase will be covered in Keith Edwards' upcoming post titled Winelover Site Visit.


©Wine -- Mise en abyme

Monday, January 23, 2017

Formulation of the #Winelover Winery Visits Task Force

Prior to its dissolution, the #Winelover Administrative Committee had created a number of Task Forces aimed at adding value to the community experience. One such body was the Winery Visits Reporting Task Force which had completed a draft document with recommendations targeted at both the institutional and individual winelover levels.

After surveying the landscape, the team felt that the benefits that would accrue to individual winelovers from access to our collective effort dictated that we share the output (despite our loss of mandate). Towards that end, we have scrubbed the document of all institutional end goals and will present the remainder in a series of posts over the course of five consecutive days beginning with today's post on the intent and formulation of the task force. Many of the findings and recommendations of the study effort will be second nature to many of you but if they provide direction and/or reassurance to even one individual, it would have been worth the effort.

A. Problem Statement
Members of the #winelover community are making trips to wineries — either as part of a community event or on their own — but a large subset of these members are neglecting to provide any reporting on these trips. This lack of reporting:

  Deprives non-attending community members from sharing in the experience and learnings
  Fails to repay the generosity of the estate by providing some level of exposure of its products and practices to the wider world.

A number of the winelovers who prepare trip reports are not communicating effectively while others are doing a quality job and their practices should be exploited.

B. Vision
The solution to the problem is envisioned to be:
  •  Concise, informative, uniform winery reports -- utilizing a variety of media -- that seamlessly document the winery visit in a manner that is:
o   Informative to Community members
o   A statement of gratitude to the estate
o   A contribution to the construct of a long-term community asset.

A Winery Reporting Task Force was established to develop tools and techniques to improve the frequency and quality of member winery reports and, in so doing, address the shortcomings listed in the problem statement.

Summary of the Problem and Expectations of the Task Force

C. Task Force
The process for development of the actual task force is detailed in the diagram below.

Task-Force-Development Flowchart

The Task Force was headed up by the author with other members to include Luiz Alberto, Sharon Parsons, Magnus Reuterdahl, Olga Mosino, Fabien Lane, and Tomislav Ivanovic.

D. Study Approach and Team Member Responsibilities
It was decided that the data needed for analysis and report development would be collected via literature searches. It was further decided that the final document would be organized as follows with the indicated team members responsible for specific components:

1. Introduction (To include Objectives and describe the team and approach taken; Keith Edwards)
2. Winelover Preparation for the Winery Visit (Including all the steps that the Winelover should take ahead of the trip to ensure collection of quality data; Olga Mosina)
3. Winelover Site Visit (To include steps taken onsite to collect information necessary for a high-quality report. To include Conduct, Data Collection, Wine Tasting; Keith Edwards)
4. Follow Up and Reporting (ID of data gaps and mechanisms for getting that data, formatting, content, and timing of reporting; Sharon Parsons)
5 Reporting Mechanisms -- the population of mechanisms that the Winelover could use to report on the site visit. Tomislav Ivanovic

Luiz Alberto provided directional guidance while Fabien Lane provided technical support.

This post will be followed by a guest post on my blog from Olga Mosina. Olga's post will cover Preparation for the winery visit and will be followed by posts on successive days from the author, Sharon Parsons, and Tomislav Ivanovic covering their respective areas of responsibility.

©Wine -- Mise en abyme

Monday, January 9, 2017

Learnings from the recent spate of actual and rumoured sales of prestigious French and Italian wine estates

With the recent acquisition of the Burgundy property Bonneau du Martray (BdM) by American billionaire Stan Kroeneke, the Louis Vuittonification of Burgundy rolls on. BdM is one of the most prestigious estates on the hill of Corton with its 11 hectares dedicated solely to the production of the Grand Crus Corton and Corton-Charlemagne. This Burgundian biodynamic pioneer had been owned by the same family for over 200 years prior to the announcement of the sale to the Screaming Eagle owner.

Announcements -- or rumours -- of the sales of prominent French and Italian wine estates seem to be hitting with increasing regularity. The table below lists the recent sales and rumors with which I am familiar.

Recent Actual and Rumored Sales of Estates of Significance
Deals Region Estate Size (ha) Purchaser Purchase Price Acquisiiton Year
Verified Barolo Vietti
35
Krause Holdings €50 million+
2016


Enrico Serafino
12.14
Krause Holdings €6.1 million
2015

Burgundy Bonneau du Martray
11
Stan Kroeneke N/A
2017


Clos de Lambrays
8.84
LVMH €100 million?
2014

Tuscany Biondi-Santi
150
EPI Group N/A
2016







Rumored Barolo Roberto Voerzio
21.04
LVMH N/A N/A

Loire Valley  Clos Rougeard
10
Martin Bouygues N/A N/A








I have previously written on the Vietti sale (and its potential implications) and Voerzio rumor and some of the factors that are potentially driving this wave. In this post I would like to highlight some of the things learned as a result of this spate of activity.

First, these deals take time. According to Jacopi Biondi (Decanter, January 5, 2017), the talks with EPI for the acquisition of the majority of the shares of Tenuta Greppo took 6 months. This leads to the conclusion that the Vietti sale had been in the works long before its actual announcement. It also leads one to speculate that there are discussions currently underway which will lead to future sale announcements.

Second, most of the sales transfer majority ownership to the acquirer, leaving some ownership (and upside potential) in the hands of the former owners. As both Antonio Galloni and I have pointed out, the lack of retention of any ownership by the Vietti family is one of the troubling aspects of their deal.

Third, buyers are aiming for the most prestigious estates in the region. That is, they are not seeking to gain a foothold in the region by buying underperforming assets and building them up. They are after the highest value estates and paying top Euro, thus driving up the value of all market players. This gets to the motivations of the buyers. In the case of LVMH and EPI, their acquisitions are focused on brand-building. And not building the brand of the acquired companies (although this may result), but extending the brand of the parent company as a purveyor of luxury goods. By acquiring these properties LVMH and EPI are able to cross-sell their luxury brands to a wider customer base and to increase the prices of the acquired products as a result of the cachet associated with the brand. I address the motivation of someone like Kroeneke in the below while I think that Krause truly wants to build a franchise in Piemonte.

Fourth, in this new environment, winemaking could become more a value-retainer than a raison d'etre. With the prices being paid for these luxury estates, the investment will not be recouped by the sale of wines. Players like Kroeneke have a very good understanding of the sports-franchise business model. In this model, you can never pay too much for the product as the new purchase price sets the industry floor. As a participant in that industry, all you have to do is to maintain the value of your franchise, hold that franchise operationally profitable for X number of years, and then capitalize on a sale sometime down the road. In this case, the value of the estate to the owner is not the wine that it produces today. Rather, it is the value that it will yield in the sale tomorrow.

Fifth, family-owned estates cannot compete in this acquisition market.

Sixth, conditions are ripe for more deals of these types. Buyers are motivated and sellers are torn. In the case of France, the difficulties of paying the inheritance taxes on these estates are well known. It is much simpler for a family to transfer assets to the upcoming generation as part of a payout on a sale rather than as a transfer upon the death of a p(m)atriarch. In addition, the economics are heavily tilted to selling if you are a family in Barolo, for example. If you use Vietti as a case in point, Luca could theoretically invest the family's €50 million at 5% compounded and in 10 years would have €84 million in hand (One would expect that his daily needs would be met by the salary he will now be drawing as the leader of the Krause Barolo holdings.). Try as he might, Luca would not have been able to approach those types of returns for his family by continuing to operate Vietti as a family holding. These operators are torn between upholding tradition and cashing in in a real big way on the works of the generations that have gone before.

Further, if the industry is becoming a real-estate play, and you are a viticulturist/winemaker, then you are miscast. You are not truly equipped to play in that game as an owner (and may not be motivated to) so why not cash out.

Seventh, in the majority of cases, the acquirer is retaining the services of the current operator. In the Vietti acquisition, Luca has been retained as the CEO while Jacopi and Tancredi Biondi will oversee vineyard operations and winemaking and serve as brand ambassadors for Biondi-Santi. In the latter case, EPI will have control of the business point of view. In the case of Clos de Lambray, LVMH retained the services of its longtime chief winemaker Thierry Brouin, the architect of the previous 35 vintages of the estate's wine. BdMs current Estate General Manager, Jean-Charles Le Bault de la Morinière, is the exception to this trend in that his position will be taken up by Armand de Maigret, the French general manager for Mr. Kroenke’s vineyards, after a "suitable" period of time.

Eighth, given their prestige, and the motivations of today's buyers, I predict future acquisition activity in the Cote-Rotie and Champagne regions, in addition to ongoing activity in the regions currently under "siege."


©Wine -- Mise en abyme

Tuesday, January 3, 2017

Out and about in Havana: In search of the co-op

I was awakened by sunlight streaming into our room through the sliding glass door leading onto the balcony. After a top-level breakfast at Sierra Maestra, we went down to the hotel lobby to explore options for our second day in the city.

We decided to start off with a city tour and opted for one of the Classic American cars parked outside the hotel. The problem, though, was that the person who solicited our business was not the same person driving the car. The person with whom we negotiated the deal spoke perfect English. Once we got into the car and engaged the driver, we realized that this was not going to work. The driver had very little English; a slight problem when you are looking forward to a narrated tour -- in English. We asked the driver to pull over and got out. We then went to plan B: the hop-on, hop off buses.

Hop-on, hop-off service is ubiquitous in tourist destinations around the world and is a great way of getting an overview of a new city at your own time and pace. The problem with the Havana service was the frequency (or, rather, the lack of same) and the paucity of information conveyed by the onboard "tour guide"(who also doubled as the cashier). After a frustratingly long wait, the bus showed up and we (wait for it) hopped on.



We began our ride in Verdado and traversed the entire length of the Malecón to Old Habana, with one or two stops along the way.

View of the Malecon with Straits of Florida in background

Sea wall and promenade of the Malecon

View of the waters from the Malecon sea wall

View Vedado to Old Havana

Hotel Nacional, as viewed from the Malecon
We disembarked at Central Park and immediately made our way over to the brightly colored vintage American cars that were lined up waiting for passengers. As we walked among the cars, we were constantly asked whether we wanted to take a tour of the city in one of the cars. Or if we wanted to have our pictures taken sitting in one of the cars.

The area was bustling with tourists walking among the cars, getting into cars at the beginning of trips, or getting out of cars at the conclusion of tours. As I stepped across the street to take a wide-angle shot of Parlo among the cars, I sensed someone coming towards me. Out of the corner of my eyes I saw him pause and look down at my socks (The tops of my socks displayed the colors of the Jamaican flag.). I could see the wheels turning over in his head as he sought to incorporate this observation into his approach. And then he pounced. He greeted me like a long lost brother. He loved Jamaica (I am not Jamaican); his Grandmother came to Cuba from Jamaica when she was 5 years old; etc., etc.



After this hearty opening, he proceeded to the lines of whether we wanted to take a city tour in one of the cars; or wanted to have our pictures taken sitting in one of the cars. Now he did not own a car. He was what I have previously described as a "steerer." When he realized that we were not interested in any car-related activities, he pitched going to the co-op where we could purchase cigars significantly below the price being charged at the hotel. This sounded interesting because I thought I would see some cigar production activities. And, according to my guy, the co-op was within walking distance.


We headed west away from Central Park and then turned south. Conditions deteriorated rapidly and we appeared to be swimming upstream against a mass of humanity that was hell bent on getting out of the area that we were going into. After walking for a little while I realized that this was the area that my wife's friend had pointed out to me from my hotel room as an area to avoid. Well, we were already in it.  My wife was cheerily taking photographs of her surroundings as we went along and I kept thinking "I know the crime rate is low in Cuba but I wished you had left that ring in the US."




We walked for a while. People looking at us because we were obviously tourists. Our "guide" hailed folks along the street and in some of the apartments which lined the street on both sides. He was as a big game hunter returning to the village with a trophy kill. Us.

After what seemed like an eternity, we turned into a dilapidated apartment building and walked down a hallway off which a number of doors opened. Living quarters all; and not very palatable. This was definitely not what I had expected when we set out on the "visit to the co-op."

There were a few other souls in the room perusing the cigar display. A woman was attempting to close a sale with a reluctant buyer so my guide launched into sales mode. Purchasing the cigars here would be helping these people and the price was significantly lower than at the hotel. As he went through the spiel, he was handing me different packaging options: Cohiba in bulk; smartly packaged Robustos; and a pocket-sized edition.

During the time that I smoked cigars seriously, Cohibas had always been my favorite. But there was an adage among Cohiba smokers: There are many more Cohibas sold than are made. There was no controlling for authenticity in this environment so I would not bite. My guide was not happy.



But he perked up when we said that we needed to have lunch. He knew just the place, he said. So we embarked on another long march to the other side of the old town. I will cover that experience in a subsequent post.

©Wine -- Mise en abyme