The wine industry has an elephant in the room that no one wants to publicly talk about – profits, so said one speaker at a recent wine industry event.
Indeed new world premium wine producers have little problem making great wine. Technically wine makers and growers across California, Oregon, South Africa, Australia and New Zealand are making more great wine than at any other time in history. Though the vines may be healthy the balance sheet ain’t doing so well. Likewise small wine retailers can fill their shops with great wine but when it comes to selling it…
The recession has been one issue but the other is a fundamental change in the market. Before we consider that fundamental change let’s look at what happened the last time wine business was under such immense pressure.
Wine business crises are not new, indeed the most infamous happened 150 years. In 1862 in France to be precise.
In 1862 vines in Beaujolais started to die
After a slow start, the disease rapidly spread across France. The economic consequences were dire, by 1884, 2.5mn acres of France’s vineyards had been destroyed and 1.5mn acres were withering away. French peasants abandoned their ruined vineyards and headed for Algeria, Argentina and Chile. High society and officers’ messes had to switch from Bordeaux to whisky and soda, perish the thought.In 1868 a botanist called Jules-Emile Planchon, spotted yellow aphids feasting on the roots of vines. It was of course phylloxera. This tiny aphid couldn’t survive the weeks on board a sailing ship even if it had some protection in the dirt and roots of an American vine. But with the steamship the aphid could survive the much quicker journey. And it survived one journey to arrive at a wine merchant’s store in Beaujolais where the disaster began.
Bizarre suggestions as to how this aphid could be stopped were put forward. Ranging from Lourdes holy water, lard, herb tea, toads and tarweed to snail slime, jelly fish, whale oil and volcano ash from Pompeii. Marching bands would drum the aphids out of their underground bunkers. Carbon bisulphide, a volatile chemical, was poured liberally into trenches dug around infected vine-footings. The aphids died, but alas so did half the vines.
Much faith was placed in the powers of urine, whether bovine, equine or human, dried or, as it were, fresh. In the Beaujolais, schoolboys were taken twice daily from their classes to urinate over vines. But while the French were happy to water the vineyards with the contents of the pissoir, they were less ready to drink the stuff. For almost 30 years French winegrowers battled to combat the dastardly bug while wine yields plummeted.
Scientists also slugged it out, as rival schools sought to come up with a cure for phylloxera – the champions of chemical insecticides (“les sulfuristes”) battled against “les americaines” of the rootstock school. This latter school was led by a man called Leo Laliman. He showed that American vines were resistant to the bug in French soil. “Les Americaines” won. Communities all around France started to work together to plant new American rootstock with grafted French vines. By 1906 wine production was back to normal – and the French now rioted over the drop in wine prices from too much supply ;).
In 2013 we face a similar problem
It is not an aphid that will destroy a wine business but poor revenue: a lack of good distributors, a lack of demand, and of middling to poor prices.
The traditional answer to a bug in the vineyard is to throw insecticides at it, the “les sulfuristes” school, understandable and how things were done in 1870. The traditional answer in the wine marketing world is to throw limited time and energy at getting a competent big distributor, big wine magazines giving big scores, and big golds in big competitions. Understandable and how things have been done for decades. Yet this is obviously a very difficult road to tread with thousands of wineries unsuccessfully attempting this route. What’s more it is a hopeful answer to the wrong problem.
The very roots of wine industry profitability have been eaten away by excessive competition, of traditional gatekeepers being unable to provide column space to thousands of great wines, of wine drinkers spending most of their time in front of digital media rather than newspapers and magazines of yore, of wine drinkers going to a wine event and being happily confronted with a hundred great wines.
Rather than turn to traditional insecticides it is time to try something else. To tear out the dying roots of wine marketing and replace them with new rootstock. It is the “Les Americaines” school of how to avoid the phylloxera of the wine business, poor revenue.
In essence, we “Les Americaines” say, the wine drinker no longer reaches for the Wine Spectator or Advocate as though it is the holy bible of wines. Indeed they reach for a computer, a mobile or an iPad and see what their friends, from down the road and across the internet, say about wines. They use Facebook, Google, Twitter and CellarTracker while at home on their computer. They walk into a wine store and use their iPhone wine app to check out what their friends, in aggregate, say about wine on the shelves. They sit on the train and read on their iPad what humorous wine bloggers suggest they try from different regions and varietals. These wine drinkers now make purchases by ordering directly online from the winery itself or the local wine retailer. In the same way they may have grown to like a wine brand through it’s magazine advertising they now grow to like it through its Facebook Page.
We “Les Americaines” say that attempting to get bigger distributors, bigger magazine reviews and bigger golds is like throwing insecticide on phylloxera. It is hard work and by the time you have waited for it to take effect your vines, rather your wine business, may be dead.
It took France 40 years to recover from phylloxera. They had to find the problem, find a solution, and then community by community plant new rootstock. These communities were helped by various experts including the government and Leo Laliman the rootstock expert.
You may be like me, a “Les Americaines”, you know that the big distributor, big magazine strategy is too hopeful. You agree that you need new rootstock to graft your otherwise great business onto. But, unlike the French, you don’t have a community nor experts to help you do this.
In the next few weeks we will be launching a new community. A community where we help each other plant the new rootstock in “Les Americaines” fashion. Rather than meeting in the village hôtel de ville we will meet in a forum. Rather than being provided advice by Laliman in the vineyard, you’ll be advised by myself in the forum. Rather than lean over the palissade to ask your neighbor’s advice you’ll post a question on the forum to seek fellow community members’ advice. In the same way Laliman may have conducted regular séminaires on the best back to healthy vines, I’ll do the same on the best way forward to healthy revenue.
A community of wine marketers
It is a community of wine business people solving the afflicting withering disease of poor wine marketing. It will be for all wine business people from the winery to the wine retailer, from Walla Walla to Central Otago.
The community will be open to founding members to join for only one week. Then it will be closed while these founding village members plant new rootstock. Once the roots have taken, the village will open to a new tranche of members. The aim is to grow in a controlled manner. Though the founding few will benefit from a lower price.
To restate this, the community will be open to founding members for a short 7 day period where you can Sign Up. After that period, membership will be closed and people who have not signed up during that 7 day period will be put on a waiting list. The membership will then be open to new members at a higher price in a few months time for a week before closing again so the new membership can be taken care of.
For more information and to be notified of the launch week, click here or on the red Notify Me button below which will take you to the official Waiting List Page:
Phylloxera history paraphrased and quoted from reviews of “Phylloxera: How Wine Was Saved for the World” by Christy Campbell.