Salvador Dali's Wine Bible

This is a link to read about the recently republished Wine Bible by Salvador Dali, and the illustrations in it are remarkable, terrifying, and related to the world of wine. I'm genuinely not sure what else to say about this, beyond how much it would make a wonderful present for Professor Rapp if she doesn't already own it. I was trying to think of my next blog post and came across the existence of this book and absolutely had to share those photos with you all.

Wine Subjectivity

I found this recent article in Wine Spectator written by a guy named Matt Kramer (not to be confused with the Matt Kremer in our class) in which he argues for the inherent subjectivity of wine being quite reasonable and makes a somewhat compelling case that you should embrace the notion of subjectivity when it comes to assessing quality of something like wine or music, because it's totally plausible that you can't point to an objective argument and yet still perceive a quality difference between items. The math person in me is a bit bothered by the argument (especially given that the end result in the example he highlights actually did come down to an objective fact, just one that was unknown at the point). But, setting that aside, I found the point quite compelling.

It reminded me of a somewhat slightly different (but super related) subject that briefly came in one of the last class sessions when Weids highlighted this question of the existence of an objective idea of "quality" and it's a subject I really struggle to answer but think about a lot when it comes to film.

On the one hand, I recognize that "objective quality" is really difficult to assess because you can't really point to objective metrics as to what makes a great movie, great piece of literature, great song, or great wine exactly. You can highlight attributes that the piece has and note that you generally like those attributes and yet I would contend that (A) Nobody has a specific litmus test of "If X has Y, Z, and A qualities I will perceive it as good" and (B) Two different people (even those both with expert status, whatever that means) will disagree as to level of quality that a work has.

Is Citizen Kane an objectively great movie? Hamlet an objectively great play? Lafite an objectively great wine? If I say no to any of those questions, at least somebody might think I have bad taste or that perhaps my opinion is incorrect. But are varied opinions on these questions always correct for that person? There's an inherent bias where all of us want to say "Absolutely!" to that question and yet I've never met somebody who doesn't sometimes judge another's taste in quality. If I tell you that I truly think a McDonald's Cheeseburger is better than a fine steak, you're likely going to think "Devin has terrible taste in food", not "Devin's opinion is equally valuable and reasonable to mine." I do the same thing all the time with film - Despite claiming to believe that subjective paradigms of quality are equally valid, I can't help but get bothered when people complain about how boring a film is that I think is great, whereas they think Michael Bay's Transformers films are all worth seeing.

It's a difficult line to draw and I tend to try to force a line by noting that any choice of an artistic work being quality is valid as long as the work is truly a piece of art, not simply a capitalist attempt to generate a profit - In that way, I tend to be dismissive of works like Bay's where I can point to the blatant product placement which gets in the way of the film, or could be dismissive of cheap wine which is mass produced. Of course, what I'm doing is arbitrarily self-serving in that I'm pretending I have some magic wand I can wave and say "that's art" and "that's not art" as if that's even objective in and of itself. It's totally cheating giving an actual answer by just giving an answer I want to be the answer. That said, it's the closest I have come to fitting an answer that is in line with how I perceive the world.

I really enjoyed our session last week on the whisky industry, especially when the conversation turned to Balcones Distilling. Balcones is located near my hometown in Waco, TX, so I have been fortunate to follow their story from the very beginning--and even sample their now infamous Single Malt before it exploded in popularity. 

Martin Daraz pressed us on Friday to think about how a distiller can cut through the noise in an increasingly crowded industry. Balcones managed to do it. What lead to their success? Even after some tumultuous times that resulted in the founder being kicked out of his own company, Balcones is a shining success in the craft distilling industry. I think their success boils down to three factors:

1. International recognition. In 2012, Balcones won the "Best in Glass" competition in the UK, competing head to head with established single malts from Scotland and around the world. This moment has often been compared to the 1976 "Judgement of Paris" that put Napa on the map. Overnight, Balcones became backordered for over a year on their single malt and become a must have for whisky connoisseurs. 

2. Consistent quality. From time to time brands are going to win competitions, but I think what happens next is just as important. Whoever spends the money and waits over a year for an expensive craft whisky better be happy with what the get. Thanks to distiller Chip Tate's fanatic push for quality, customers who sampled the Single Malt after the awards found the same high quality spirit that won the competition. 

3. Differentiated products. For a few years, it became nearly impossible for customers to get their hands on the Single Malt, so customers turned to Balcones other whiskys. Balcones offers about a half dozen other varieties and they are not afraid to be bold. One whisky, my personal favorite, the Brimstone, is unbelievably smokier than any other whisky I have ever sampled. When I did a tasting at the distillery last summer, our guide told us that 4/5 people hate it, but for 1/5 people it is their favorite whisky. I am one of the 1/5, and Brimstone has been the whisky I have purchased the last three times I bought a bottle. The lesson here for a craft distiller is to be bold. More sales will be driven if you are 20% of customers #1 choice than if you are just likeable by most drinkers. In an increasingly saturated space, boldness is rewarded. 

Wine Advent Calendar?

I really enjoyed getting to taste a wide variety of wines in this class. I was wondering about how to incorporate wine tasting into my life and how to push myself to continue to try different wines. I found one solution that is very season appropriate - Wine Advent Calendars.

Town and Country magazine put together a list of alcoholic advent calendars, including affordable options from Aldi and Virgin.

Researching the topic online, I was surprised to find that most options for wine advent calendars focused on affordable wine. There were no options for premium wine.

I would guess that this might be because many premium wine producers 1) do not produce 24 SKUS and 2) do not readily produce small advent calendar sized bottles. 

I wonder if there is space for a third party to curate a premium wine advent calendar at a 100 to 200 dollar price point. 

 

Wine in Lebanon

Coming from Lebanon, one area of interest of mine is Lebanese wine. Growing up (well, after the age of 18) local wine was something that I became quite familiar with. I had always thought that local wine was a new concept that was not entirely authentic to Lebanese culture, and only recently did some research about it...

I was surprised to learn that Lebanon is supposed to be one of the world's oldest wine regions, particularly the Bekaa valley (shown below)with a temple dedicated to Baachus, the Roman God of wine, agriculture and fertility.


Chateau Ksara and Kefraya are the two biggest wine houses, producing a variety of wines including Cabernet Sauvignon, Merlot and Rhone varietals. The 'Chateau' in the name is no surprise given Lebanon's close relationship to the French.

Wine tourism was experiencing some increased popularity, especially locally, but given the Bekaa valley's proximity to Syria and danger zones, wine tourism currently doesn't realize it's full potential in Lebanon.

Winning as a wine retailer

The past two weeks was a great education on the business and overall trends of the wine industry. In particular, we had a close up look at the various choices and paths that wine producers could take. While we did not go into as much detail on retail, I have always contemplated opening my own wine retail in the future. When I started drinking wines 14 years ago, there were still not many wine shops in Singapore. Many have since popped up all over the island. Most have come and gone as it is a highly competitive business. If I were to start a wine retail business, I would model it against K&L wines, as I think they have created a nice niche for themselves.

First, K&L wines offers a highly curated consumer experience. It starts with the small store space, just about 2000 square feet, which makes wine browsing a  manageable and enjoyable experience. The staff are highly passionate and knowledgeable about wines. I also trust the wines sold by K&L. I've almost never been disappointed by any wine I bought there. They also have a reliable supply of popular and unique small production wines. This means, however, that K&L needs to manage their relationships with a whole host of wine producers and distributors.

Second, K&L is focusing on a sustainable business. Despite its strong branding, nation-wide repute and growth potential, it has limited its presence to key cities in the West Coast and kept to 3 stores in San Francisco, Hollywood and (thankfully) Redwood City, as well as an online store. They have built a strong business targeting high net-worth consumers in the Bay Area and LA. While it is tempting to expand to the East Coast, there are several incumbent retailers there hat have their own loyal customer base. It would be more astute to bank on their strong reputation and grow their online presence to ship to other states.

Third, K&L offers value-added services such as wine cellaring. This creates complementarity and lock-in as premium customers are more inclined to go through K&L to order low availability premium wines and have K&L directly store the wines in their personal lockers. Customers would also be inclined to fill up the lockers and buy more wines. For those of us thinking it might be a tough business given the pricey real estate, they are likely making great money. Having done some rough calculations, at full capacity, their wine locker business would yield revenues of $20 per sq foot. Assuming storehouse rent in Redwood City to be $5 per sq foot, even after factoring operating costs their gross profit margin could be somewhere between 200 to 250%. 

There’s always room for improvement and K&L could start by revamping their online store. While I find K&L’s website good, it is setup like a translation of their physical store to the online space. They would need to modernize their online platform to be more approachable for newer consumers and actively court the younger millennials in the Bay area.

Wine Tasting for Dummies (Hint: We're All Dummies)

I really enjoyed the visit from our guest speaker/wine blogger, Alder Yarrow. I was expecting someone who has tried thousands of wines and blogs about them on a daily basis to come across as much more...snooty. Instead, he made wine tasting an enjoyable and approachable concept. I particularly liked his and Alyssa's point that wine tasting takes practice because humans generally experience difficulty with verbally expressing the inputs to their olfactory systems. This is why practice is so necessary for refining one's wine palace--we're all kind of wine dummies to begin with. This is especially encouraging for a novice like myself, who really enjoys wine, but often slurps it down without considering whether it smells like cat piss on a gooseberry bush or tar and roses.

I thought the most helpful tip Alder gave was using aroma cards or the AromaApp to practice identifying aromas and flavors when tasting wine. Doing so will likely make the process of identifying wine tasting notes less nebulous and will also help build out one's tasting note lexicon. Having the AromaApp handy would have been particularly helpful when Alder shared a Willamette Valley Pinot Noir with the class. He described it as having notes of vanilla, blueberry, and mocha. I described it as smelling like a muffin. I think we were basically picking up on the same things, yet he sounded like a sommelier, and I sounded like an unrefined ogre. I am going to download the AromaApp as soon as I finish this blog post.

Another piece of Alder's session that I found enlightening was his insistence upon finding wine critics whose tastes and perceptions align most closely with my own. I had previously assumed that all wine critics were i) roughly in agreement with their assessment of various wines' tasting notes and ii) right. It was interesting to learn just how individualized taste is (especially in light of the studies we read that show that most people have a really difficult time even discerning whether two wines are the same or different!). Thus, I really liked the idea that some wine critics share a similar palate and perceive tastes and smells the way I do, and those are the wine critics whose advice I may benefit from the most.

Lastly, what really resonated with me from Friday's session was the following concept: We like what we like, and at the end of the day, who really cares what the wine critics have to say?

Cheers!

Fake Lafite in China

It is well known that the sale of counterfeit wine is a rampant problem in China. A Forbes article estimates that 50% of wines retailing for $35 or more in China are bogus. Empty bottles from brands like Lafite “fetch up to $1,000 a piece on the black market, which are ultimately re-corked and re-sold to unknowing buyers.” These bottles are often filled with Chilean wine, which incurs almost 0% import tax (vs. up to 50% for most wines), or wine from local Chinese vineyards. One of the only ways of avoiding counterfeit wines is to purchase “ex-cellar,” i.e., sourced directly from the cellars of producers like Chateau Lafite Rothschild. Otherwise, auction houses selling these wines cannot guarantee the provenance of the bottles.

I find the coverage about counterfeit wines interesting, particularly in the context of Lafite’s strategy to produce wine in China. On an obvious level, the retailing of fake wine is brand damaging. A person who spends up to tens of thousands of dollars on a wine that turns out to be fake may be unlikely to do so again. Even worse, a person who spends this sum on fake wine and does not realize the counterfeit may have a lasting negative impression of the brand’s quality.

While the sale of counterfeit wine is clearly a huge problem for wine collectors, I wonder whether the risks to the brand are slightly overblown. Firstly, major producers would generally never capture the upside of these massive price tags – since most wine is sold en primeur, they do not capture the value from wine sales on the secondary market. While one could argue that counterfeit wine is brand damaging in the same way as a fake Louis Vuitton might be, I don’t believe these are analogous. The purchaser of a Louis Vuitton, for the most part, can find out whether they are buying a real or a fake. The purchaser of a 1959 Chateau Margaux cannot (unless purchased ex cellar). The second article describes a collector who opened three of such bottles at a dinner party before he found one that he thought was genuine. He remarks, “What can you do? Enjoying old wines means taking risks.” This ability to take such expensive risks - whether the wine is no longer good or was never real in the first place – is an extreme luxury that enhances the status of the collector. I wonder whether the prevalence of fake wines actually increases the allure of the real thing.

I question whether the play to provide more accessible, Chinese grown wine has more brand damaging implications for Lafite. Unlike Lafite’s other markets (e.g., Chile, Argentina), wine from their Chinese vineyards is being produced for Chinese consumption. Particularly for a set of consumers that tend to spend money while traveling and place a premium on “old world” provenance, I suspect that prevalence and accessibility will dilute the exclusivity that makes Lafite a luxury brand. Perhaps Lafite should spend less effort worrying about counterfeit wine and more revisiting their strategy to prevent brand dilution.

Source: https://www.forbes.com/sites/pamelaambler/2017/07/27/china-is-facing-an-epidemic-of-counterfeit-and-contraband-wine/#2dbb4e995843

https://www.forbes.com/sites/jeanniecholee/2016/06/04/how-to-avoid-fake-wines-at-auction/#c7f91cb5113a

Growth of Chinese Wine Industry

When I heard about Chinese wine a few years ago, the first question is “are they making wine?”. Knowing about Chinese drinking culture and their love for traditional spirits, China doesn’t seem to be right place for wine. However, discussion on China wine market in the class, and a bit of research on the market astonished me. China is the 2^nd largest country owning vineyard behind Spain, and 8^th largest wine making country.  Just like other manufacturing industries, Chinese wine industries are growing fast based on huge consumption based and capital investment.

Even though, there are diverse views on the future of Chinese wine industry, there are some facts important to notice; new vineyard development by government supports, continuous inflow of foreign wine experts, and strategic alliance between global wineries and local makers.

This movement of Chinese wine industry is exactly similar to other successful Chinese manufacturing industries such as electronics, industrial equipment, and automotive. This is a proven success formula of Chinese business, and that’s why I am more interested in the future of Chinese wine industry.

Within short history of wine making, some of local winery such as ‘Grace Vineyard’ is writing a success story. A vineyard located in Shanxi is getting recognized by global wine professionals and institutions. By focusing on quality with France wine experts, sophisticating wine bottles and label, and broadening marketing channel by support of government, Grace Vineyard is growing into international beyond local market.

Even considering some negative effects on wine market – anti-corruption rule, drinking culture and behaviors – local demand is growing more than 12% CAGR.

Chinese growth strategy, growing success story, and strong demand. That’s why I expect growth of Chinese wine industry in near future.

More than Gabriel: How Gabriel-Glas can connect with today's wine drinkers

In our first class, I asked Tempe about how she can connect with consumers who aren't familiar with Rene Gabriel. The power of that name only exists for older, higher class, more refined wine consumers -- a very small portion of Gabriel-Glas's target market, and an even smaller portion of the broader population. I wanted to offer my own assessment and recommendations to help Tempe. To start, who is the customer? Excluding the refined, older, wealthy consumer for whom the Gabriel brand holds meaning, there are two major paths to becoming a Gabriel-Glas (GG) consumer: 1. Be in the upper quartile of income (for domestic US population) 2. Be engaged and put Gabriel-Glas on your wedding registry There's a fundamental truth that I need to establish upfront: truly middle-class families (median US household income = $55k) cannot afford to spend $29 per stem or $174 for a set of six. That's fine, we just need to own who the market is. For the first sub-market, the persona I build for this customer is a 28-38 year old urban dweller who enjoys indulging in a good meal and a solid wine. She or he frequents restaurants with friends or a partner, but also hosts the occasional dinner party or wine and cheese night. Her or his days are spent building a career, and evenings often start with a glass of wine to wind down. There are two potential paths to reaching this consumer: upper-mid market home stores (e.g., Crate & Barrel, West Elm), and restaurants. I think the second path is the most exciting, and would recommend GG explore retailing through urban higher end restaurants and wine bars (entrees ~$20-30). GG could offer the stems at a wholesaler price point to these restaurants, which would use them for dinner service and benefit from the refined image that the wine glasses represent. The wine list would include a note to "inquire for purchase of our Gabriel-Glas stems." Because the experience of using a Gabriel-Glas is so delightful, I think many patrons would be interested in purchasing stems at the restaurant and simply adding it to their bill at the end of the night. I've seen this model pursued successfully by restaurants like Porsena in New York (www.porsena.com). Porsena lists cookbooks and high end ingredients as well as lotions at the bottom of their menu. They pull it off seamlessly because the entire restaurant is so refined and classy that selling items seems like a special favor they are offering to patrons. I also think there's space to partner with digital wine retailers who focus on educating customers. GG should consider a partnership with places like The Perfect Sip or Winc. For the second market (engaged people who may not be able to afford wine glasses on their own), Gabriel-Glas would be a strong fit for any registry. Because GG does not offer volume discounts, the $29 per stem price point is perfect for wedding guests who might not be able to afford a more expensive gift. The trick is standing out from other wine glasses on the registry. On the push marketing side, GG could try to cut a deal for preferential sorting when a customer is selecting stems. On the pull marketing side, GG should reach out to wedding websites (e.g., The Knot) and Instagram handles to be featured on their sites. If there's only one outreach that GG does, I recommend Instagram influencers (e.g., think lifestyle handles and more targeted audiences, like Bachelor contestants -- only the classy ones though! -- or home decorators) and wedding handles; because this is such a visual product, the stems will stand out for their beauty and elegance. Additionally, I think video marketing would be strong for GG. GG should explore creating visually full but verbally subtle (probably word free)30-second videos for placement on Facebook or Youtube, and measure conversions off of those videos. And in general, I think Gabriel-Glas should redo their website to be more visually strong, and update the content to focus on messages that resonate with today's wine drinker. The website looks stale, and the commentary almost exclusively from sommeliers and wine critics misses the point of people drinking wine because it brings them together. When I look at the website, I think these glasses are for an older, stuffier wine drinker -- not for me. The visuals and messages should resonate more with young people, and should take advantage of the visual appeal of the glass. Instead of posing the stems with the black box, the landing page should be a video of a relatively youthful hand swirling wine in the glass, or an image of a table set with bread and olive oil with the wine glasses glimmering around the table. GG needs to take advantage of their website as a way to connect with customers. I hope this helps!