Stanford GSB

Stanford GSB

Sunday, February 28, 2016

The Oscars, Wine, and Pandora

While watching the Oscars tonight, I began thinking more about the role of the wine critic - as compared to the role of the movie critic. Just as "experts" vote on movies each year, wine critics vote on wine awards each year as well, at various competitions throughout the world. But how meaningful are these awards, if they are based on subjectivity and are bound to be influenced by human error?

If winemaking, like movie making, is viewed as an art, then maybe we should view the role of the critic as interesting but not authoritative or completely accurate. Critics, just like artists, are subjective to some degree. In thinking about whether or not a personal preference equation could be created for wine based on the combined reviews of these critics (as well as personal data), I wonder about other goods for which a personal preference equation could be created - food, music, movies, books. Can the Pandora model be extended successfully to other areas or industries?

Possibly - I think the idea has potential. But music is generally less expensive than some of these other goods - and Pandora actually provides the good (music itself) at zero, or very low, cost. People who want to treat wine as a CPG may not want the complexity - and thus the implied variety - that such a personal preference equation might offer. For these individuals, they may simply want to go to the store and pick out from a choice of 6 wines from each category - reds, whites, roses, sparkling - in 5 to 10 minutes. As long as the price point is reasonable and the wines are drinkable, this may be "good enough" to fill their needs. And for people who love to learn about and explore wine, the idea of a personal preference equation might be limiting - they may want to challenge their palates, to continue to reach beyond the range to which they are accustomed, and to allow for organic and even unexpected growth and changes in those personal taste preferences. But I do think such a quantitative analysis could be useful for a group in the middle of the spectrum, who don't fall on either end; the question is how many consumers fall into this category, and are they interested enough to spend the time - and the money - crafting their own personal preference map?

Friday, February 26, 2016

How History Explains the Present

From the past two classes, we've seen the reliance on how ratings and "the clown Parker" according to Peter have literally formed a massive movement and trend around wine sales in the past several decades. People are now "teaching to the test" creating a homogenizing effect for wine and not innovating, because they simply want to sell the retail score as part of the story; "A 90 point wine by Robert Parker" sells! And when a customer goes to the store to choose from a wide selection, they feel there is a lacking objective judgement and the point score is a great way to be able to decide!

Even before Parker emerged in the 70s, the Department of Viticulture and Enology at UCDAVIS established a 20 point system, noting that points would be awarded or subtracted based on having specific flaws; Harry Waugh would say this is a "16 point wine" and people would listen! However, everyone's sensitivities are very different and based on character, varietal blend, elegance, breed, and finesse, wines should not be categorized, but rather have flexibility to understand why an 80 to someone is a 95 to someone else. While there is no evidence, there is an interesting viewpoint that those that wish to be evaluated or rated, have an incentive to do everything they can to inflate their status, taste, and likability factor. How they do so is ambiguous, but maybe this is good after all because the consumer is the ultimate benefactor. 

Critics as Entertainers

The way that the class on Monday was divided into two sections neatly reflected dual (and sometimes opposing) roles of critics. Professor Malter provided an excellent history of wine ratings and outlined the role modern critics such as Robert Parker play in providing objective metrics for subjective qualities such as taste. The panel of Mark Oldman and Alder Yarrow provided a very engaging example of critics as entertainers and populists. I would argue that critics as entertainers are becoming more important than critics as judges.

As Malter noted, the modern ratings systems were created to instill discipline in the wine industry; the traditional "Crus Bordeauxs" rating classifications were outdated and provided no incentives for winemakers to produce high quality wines. They have served their purpose, and raised the quality bar across the board. However, as he also noted, differences in ratings at the top (87+) no longer provide us with much objective information about quality of the wine; rather, they reflect subjective differences in taste as determined by the critic, which are unlikely to correspond with your own. Since these differences in ratings at the top (87+) have real effects on price, winemakers must constantly adapt to the tastes of respected arbiters such as Parker to survive.

With the internet, blogs and social media, we can access curated or crowdsourced reviews about wine that may not be able to distinguish between best in class and very good wines, but can surely identify when quality is too low. Since this problem of identifying quality was the reason for modern wine ratings in the first place, I believe today's consumers will identify more with entertaining critics who can tell a story about the winemaker, produce entertaining video blogs, or write books with chapters on "bon mots to describe the effects of alcohol." Further, I would argue that these types of critics are doing the modern wine industry more good by popularizing wine and reaching new consumers.



Kalin Wine and when wine is ready

When I was up in Oregon a few weeks ago, I went to a cool tasting at a winery called Antica Terra. The tasting was unique in the fact that the winemaker gave us 9 wines, 3 of which she made and 6 of which she didn't. When was the last time you went to a winery and a winemaker tried to sell you someone else's wine? She shares wines not made by her to show customers what wines inspire her. Some of them were absolutely astounding and some of them were simply controversial. Of the controversial sort was a Sauvignon Blanc made by a producer called Kalin Cellars that looked like this...



As you can tell by the color, it's not your typical sauvignon blanc. It's a 2001 wine that was just released this year. It flies in the face of all common wine wisdom that sauvignon blanc should be consumed within the first few years of vintage. That's because Kalin Cellars is known for producing wine and then holding it until it is "optimal" to drink. This approach came out of the owners point of view that Americans are drinking wine too young and losing out. Kalin Cellars believes that by only selling wine when it's ready, the owners are stopping "people from committing infanticide." The man and his wines are clearly colorful characters.

Besides the fact that Kalin wines taste absolutely unique due to the aging, it prompts an interesting question of when are wines ready and how do we know? If you buy a good bottle of wine, you can generally find out how long you're supposed to keep it. It might say "good to drink now but will improve over the next X-Y years". The only way to know that optimal point is to try it every now and then (through Coravin or multiple bottles) to see when you like it most. However, Kalin Cellars takes that to the extreme and holds wine way past the point where most people would say it's good. These wines remain drinkable (but highly polarizing...you can ask Katie McGee, I forced her to drink one), even though most wineries would have written them off already. This only makes me further question the value of the critic. If we can't agree on when wines are good for drinking (now, 5 years, 20 years) and what good wines taste like, how do we ever know the quality of a wine?

Blogging about Blogs

As the title suggests, this is a wine blog post about wine blogs.

There are plenty of other ones out there besides Vinography.com. I’ve flipped through a few dozen of them and assembled a list of the best ones, so that you don’t have to! These might serve as good resources as everyone works on final projects.

General resources
·         EnoBytes -- http://enobytes.com/
o   Massive website with everything from ratings to meal pairings to general articles
·         Wine Pages -- http://www.wine-pages.com/
o   Venerable website for the masses, with quizzes, tasting notes, dictionary, educational content, and discussion forum
·         Oenologic -- http://www.thoriverson.com/
o   Longer-read pieces about goings-on in the business. Worth posting here because he also writes about other blogs

The serious stuff: wine business, economics, politics
·         Dr. Vino's Wine Blog – DrVino.com
o   Explores the intersection of wine, politics and business, including commentary on current court cases
·         Academic Wino – http://www.academicwino.com/
o   Shares the latest research and advances in wine-making and comments on general industry themes
·         The Wine Blog -- http://www.wine-blog.org/
o   Posts about everything from the importance of wine competitions to rankings of the best wine businesses
·         The Wine Economist -- http://wineeconomist.com/
o   All about the culture, history, and human behavior around wine

Region-specific Blogs
·         Wine Tasting, Vineyards, in France – WineTerroirs.com
o   Run by a photographer, with insights on everything from corks to the best Paris wine bars­
·         Grape Wall of China -- http://www.grapewallofchina.com/
o   About Chinese consumption and sales more than production, though there is some of that as well. Not exclusively China-focused, but with plenty of Asian content. Yao Ming has a wine brand?
·         On The Wine Trail in Italy -- http://acevola.blogspot.com/
o   Not just Italy (also California and Texas)
·         The New York Cork Report -- http://www.newyorkcorkreport.com/
o   Not just NY, mainly looking at Midwestern wines, and even some beers, liquors, and food. Supports local growers.

Other tasting and general wine blogs
·         Veritas in Vino – AliceFeiring.com
·         Travelling wine chick -- http://travelingwinechick.com/
·         Wine Curmudgeon -- http://winecurmudgeon.com/ (check out the post about the Shark Tank pitch of flavored wines and single-serve bottles!)
·         The Wine Harlots -- http://wineharlots.com/
·         The Morning Claret -- http://www.themorningclaret.com/
·         Affairs of the Vine -- http://www.affairsofthevine.com/
·         The Frugal Wine Snob -- http://www.thefrugalwinesnob.com/  


I’m sure I’m missing at least a few essentials. Share your favorites with us in the comments!

Revival of Extinct/Outdated Wines -- Falanghina

Drilling a little further on the recent themes of consumer tastes and trend-driven production, I thought it would be interesting to look at the case of falanghina grapes from Italy. The varietals are some of the oldest in Italian history and formed the base of major Roman winemaking, but fell out of favor for most of the 20th century amid critiques that they produced flat, uninteresting and otherwise mediocre wine. Nowadays, there's been a resurgence in interest in cultivating the grapes (primarily in Campania) as advances on both the vineyard and winery ends have begun to "tease out" some of the floral/citrus notes that previously lay dormant. Falanghina is by no means challenging any of the established whites, but there may be potential here to follow the much-documented success of rose. You could argue that the rise of rose is due in no small part to the increasing pairing of wine with casual meals, the preference of consumers for simpler, less complex vintages and the emergence of a consumption-focused market (given that rose generally ages poorly). Once those trends take root in an appreciable segment of the market, the previous stigma attached to bringing a bottle of rose to a social event is nullified--or even arguably reversed these days. Similarly, if falanghina is representative of a class of "easily drinkable" wines that are characterized by relatively little complexity, a mid-tier price point but an appellation (Italy) that connotes at least a base level of quality, one could imagine a campaign that carves a space out for it as a "casual white" (much as rose has become the "picnic wine").

(http://www.nytimes.com/2015/06/17/dining/wine-review-falanghina.html; http://www.italiantribune.com/the-resurgence-of-falanghina/)

Jeff

Thursday, February 25, 2016

Escape from Parkertraz

As Mike Mester pointed out in his post and as I briefly commented on, the whole Robert Parker phenomenon felt all too familiar coming from another luxury industry with highly educated consumers, where commercial success and prestige are goals and motivators that are entwined and tangled together in complex and sometimes baffling ways.  Indeed, the game seems to begin in earnest at the high end -- as Daniel Malter pointed out in his presentation, the inflection point where score starts to matter is 87.

I think people in the inner circle of this sort of world have inflated notions of what prestige means.  Theater is indeed a good analogy here -- there is one critic at The New York Times who is the go-to for all the most prominent shows to come out on Broadway and even worldwide each year:  Ben Brantley.  He has his own eccentric tastes, championing shows like Honeymoon in Vegas that pretty much evereyone else hated, but his own theatrically phrased praises are plastered below the marquees in Manhattan with an exhilirated sense that his opinion is the fuel of success.  And in the era of social networking, his reviews actually don't hold a lot of weight with the consumers, who our industry research shows are more concerned with recommendations from friends and other considerations.  But for producers and creatives in the industry, Brantley's review is the single most important reaction they are waiting for, because prestige is most important to them, and in their cloistered offices prestige must be equivalent to box office success, even when it's not.

Escaping Robert Parker was a pretty depressing mosey down a parallel lane, and if anything, a magnification of the critic-as-ultimate-arbiter pageant.  The film begins with a network-TV interview that aggrandizes him further with a sense of magnificence that this fellow would very likely have seen none of if he had stuck to his career origins as a lawyer.  Maybe being a lawyer helped him in knowing how to tangle and escape unscathed, since the estate bans that he's elicited from disdainful wine proprietors indicate that he has cut at their central occupations in ways that have left more than mere bitterness.  I can't say I'm an expert in where the lines between criticism, libel, and conflict of interest lie, though I certainly remark that the hefty regulation that suffocates so many stakeholders in the wine industry does not extend to the critics, who are free to champion and to trash as they please.  So it's all the more disturbing when at the beginning of the documentary a mainstream source is asking if he's the "most important critic of anything."  Well, drama sells in journalism, too.  Maybe the impetus to be a lawyer is also that same impulse to "hold people accountable" (especially for things you can't do yourself).  

Mike and I were talking about the film and both found it could have used some editing, though I reflected later and thought, giving the filmmaker the benefit of the doubt, some of it may have been intentional.  They were picking on a relative nobody in choosing downcast, perpetually single Julian to chronicle his misadventures in France, the US, and China, and part of the point may have been the relative boredom and ignominy -- Parker is inaccessible, not interviewed in the film, and barely able to be grabbed for a little chat about his lack of attention to rosé.  It stuck with me when Jules remarked that selling was actually harder than making wine -- would that be the case if there were really an efficiently sorted marketplace out there?  Or is Jules just trying to excuse his failure to create a superior wine?  Harder to know without a tasting.  And there is some hope after all, as he finally gains some recognition for quality from a French guidebook towards the end of the movie.  However, the prevailing atmosphere of his story is pretty mundane or downbeat: making notes in books, handling details with potential customers, laboring on and on for a cause that hasn't brought him real money and that seems to preclude him from having a family or even a lasting romantic relationship.  The drink may be a symbol of romance, but the life of the average winemaker is far from romantic.

Amusingly, Angelo Gaja appears in the film as well, a familiar persona from earlier in our class, remarking that everyone in Italy believes himself/herself to be Robert Parker.  I wondered if part of the dynamic here and with the resistance of French wineries to Parker might be Europeans resenting the idea of taking aesthetic direction from a New World critic.  The French and the Italians here would both prefer an older world where relationships are made more directly and people are more connected with a region and a culture.  The American seems to have reduced an ornate and rich market to a false Darwinian contest that no one knows how to win, unless of course they hire a professional Parker consultant.  Jules asks for advice from a guy attached to the big man, but the immediate response is, would you like to hire him as a consultant?

Let me be more cynical than I mean, to make a central point about Parker.  He is an entertainer, too, one too lofty to style himself as such, but for the New Yorker-reading set that peers down the nose at the sight of explicit commerce, but that simultaneously pays elevated prices for refined pleasures.  And for refinement, you at least need to pretend you're looking at something other than money, else you let on you're déclassé.   Parker offers simplicity of choice wrapped in high manners and layered phrasing -- as simple as a number, and a number that isn't the price.

I don't mean to be too snide.  Critics can serve a valuable purpose, and I consult them plenty for my favorite arts.  Still, a critic should be fair game for pointed criticism from others.

Wednesday, February 24, 2016

How Much is too Much?

As an Australian, I love Penfolds.  Penfolds was founded in 1844, and is Australia's most reputable winemaker.  In 2012, Penfolds introduced the 2004 Kalimna Block 42 Cabernet Sauvignon - it's best and most expensive wine (priced at $168,000).

The wine was presented in a limited-edition crafted vessel, which they called the Penfolds Ampoule (see picture below) and the Ampoule contained Cabernet Sauvignon produced from apparently the oldest continuously producing Cabernet Sauvignon vines in the world (planted in the 1880's).  The wine had repeatedly been awarded 100 points (by James Suckling and the Wine Spectator).

I don't doubt that this wine must have been pretty pretty amazing, but surely $168,000 is too much for a bottle of wine.  How much benefit can one really get from drinking a bottle of wine.

Penfolds focussed their marketing efforts in Asia and were successfully able to justify the price due to the quality of the wine, its exclusivity (only 12 Ampoule's were made) and due to the quality of the crafted vessel that it was contained in.  In order to sweeten the deal, Penfolds also offered to send one of their senior winemakers anywhere in the world to prepare the wine by cracking open the Ampoule with a tungsten-tipped sterling-silver scribe-snap to ensure that the wine was experienced in the best possible way.