The wine industry, in contrast with spirits and beer, is highly fragmented. In 2010, the top 10 wine companies accounted for just 13% of global wine volumes.
Perhaps this speaks to our belief that wine is a highly individual product. We assume that any interference by a giant corporation would lead to profit-seeking at the expense of the wine’s character and quality. Certainly, I have come across a number of winemakers for whom the word “shareholder” is anathema.
What hopeless romantics we are!
The truth is, winemaking is a capital-intensive business, and a winery can benefit greatly from an injection of funds to update vineyard and winery equipment. Not to mention access to distribution channels and a marketing team, thus freeing the winemaker to concentrate on production.
Already, many of the names we are familiar with are owned by conglomerates. Cloudy Bay? Bought by LVMH. Ditto for Dom Pérignon, Krug and Château d'Yquem. Famed “super-second” Château Pichon-Longueville is owned by a subsidiary of the French insurance group AXA, which also has wineries in Portugal and Hungary.
In Australia, a country that has seen rapid consolidation, over 70% of its wine is produced by just four companies; Accolade Wines, Premium Wine Brands, Casella Wines (think Yellow Tail) and Treasury Wine Estates (TWE). The last is notable for having a strong line-up of American brands in their portfolio in addition to Australian wines.
TWE recently held a tasting of premium Napa Valley wines at the Singapore American Club (a very appropriate location). Michael Kluczko, Head of Winemaking, was on hand to emphasise the story behind each of the brands.
The history of Beringer, for example, is inextricably tied to the history of Californian winemaking. Founded in 1875, it is the oldest continuously operating winery in the Napa Valley. During Prohibition when many wineries were forced to close, it took advantage of a loophole to keep in business by making wine for religious purposes. At the end of Prohibition it was the first California winery to open its doors to the public. Nowadays, many wineries offer public tours, but it was a revolutionary step at the time.
Etude, a winery under the TWE umbrella that produces Pinot Noir and Cabernet Sauvignon-based wines, owes part of its success to Beringer. It was a viticulturist from Beringer, Bob Steinhauer, who planted Pinot Noir in the cool Carneros region that would form the backbone of Etude’s bottlings.
Before its purchase by TWE, Etude was a small but well-regarded operation that was sold almost exclusively in restaurants. Fittingly, then, that the tasting featured a food and wine pairing segment where the Etude Heirloom Carneros Pinot Noir was paired with smoked salmon with avruga caviar, seaweed puree and champagne cream sauce.
Red wine with fish? Yes, and a delectable match. The low tannin levels of the Pinot Noir meant that there was no reaction with the oiliness of the salmon (which can result in an unpleasant metallic flavour), and the acidity of the wine refreshed the palate beautifully. Michael says, “When a wine and food pairing works, it enhances the wine… it explodes the flavour, concentration and aromatics”.
The highlight of the tasting was a vertical of Chateau St. Jean’s Cinq Cepages wine, so named for being a Bordeaux-style blend of five varietals; Cabernet Sauvignon, Merlot, Cabernet Franc, Malbec and Petit Verdot. The 1996 vintage, which was released at a very affordable price of US$28 was voted as “Wine of the Year” by Wine Spectator Magazine.
These wines veered away slightly from the theme of the tasting, as the grapes were sourced from neighbouring Sonoma rather than Napa County. Michael states that the goal of Chateau St. Jean is to make wine that is not overoaked, stating that “We always want the vineyard to show through”.
The US economy may be in a funk, but TWE’s premium American brands are doing well, especially in Asia. The notion of wine being made by a corporation rather than as a family business may be jarring to some, but TWE has selected wineries with a rich history and track record of producing quality drops.
The backing of TWE means that these wines are now more easily available to local wine drinkers than ever before. For most consumers, that’s a winning combination.