Which three forces have shaped the evolution of the modern wine market more than any others? What is a wine economist? How have the wine industry and wine buyers evolved in the past 10 years? How does that impact the wines you drink?
In this episode of the Unreserved Wine Talk podcast, I’m chatting with author and editor of The Wine Economist newsletter, Mike Veseth.
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- What is a wine economist?
- How did a budget vacation start Mike on the path of becoming a wine economist?
- How do the three main forces outlined in Wine Wars shape global wine?
- How does the natural wine movement act as a push-back force in the industry?
- What is a terroirist?
- What fascinating new stories will you read about in Wine Wars II?
- Which wine buyer insights were uncovered through Project Genome and how did it impact the industry?
- Why is it a bad idea to paint all celebrity wine with a broad brush?
- Which wine brands have leaned heavily into their image and seen huge success?
- What did Mike learn about silk road terroirists in writing Wine Wars II?
- Why are there so many terroirists in the Republic of Georgia?
- Who is Chinese wine for?
- How has Chinese wine evolved and what impact did the pandemic have on domestic consumption?
- I found it interesting how globalization at one end of the spectrum and terrorists at the other end are having a profound impact on the style and type of wine we drink now.
- Mike gives us great insights into what a wine economist does.
- The wine industry and buyers changed so much in the past 10 years.
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It risks losing its soul because it becomes more about the image than the wine itself. - Mike Veseth Click to tweet
Georgia is the ultimate terroirist place because not only does everybody drink wine but almost all families make their own wine. - Mike Veseth Click to tweet
About Mike Veseth
Mike Veseth is editor of The Wine Economist newsletter (WineEconomist.com) and author of more than a dozen books including Wine Wars (2011), Around the World in Eighty Wines (2018) and Wine Wars II: The Global Battle for the Soul of Wine (2022). He is a sought-after speaker at wine industry meetings both in the United States and around the world.
Veseth’s writings on wine and globalization have been widely praised. Globaloney was selected as a Best Business Book of 2005. Wine Wars was chosen a Best Wine Book of 2011. The Wine Economist was named Best Wine Blog by Gourmand International in 2015. Money, Taste, and Wine: It’s Complicated received the 2016 Gourmand International award for Best Wine Writing. Around the World in Eighty Wines was named one of the 100 best wine books of all time by BookAuthority.org.
A noted educator, Veseth is professor emeritus of International Political Economy at the University of Puget Sound in Tacoma, Washington. In 2010 he was named Washington State Professor of the Year by the Carnegie Foundation for the Advancement of Teaching and the Council for the Advancement and Support of Education.
Veseth received the Bachelor’s degree in Mathematics and Economics from the University of Puget Sound and the Master’s and Ph.D degrees in Economics from Purdue University.
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Natalie MacLean 0:00
Is wind losing its soul?
Mike Veseth 0:02
Well it certainly risks losing a soul. Because it becomes about the imaging more than the wine itself with at least some celebrity wines. It could be from anywhere. It could be made by anyone. It could come out of a big tank. Gérard Bertand is famous in France as a winemaker, but also he’s even more famous as a rugby player. He played on the national rugby team. And so he’s a big guy. I came up to him and I said, you know, Gérard, when I first heard about your wines I thought that this was just celebrity wine and he rose up. But of course, then I tasted the wines and this was an honest thing. And many of the wines are so expressive of place. There were some of the very best wines that I had had when we toured through the south of France.
Natalie MacLean 0:56
Do you have a thirst to learn about wine? Do you love stories about wonderfully obsessive people, hauntingly beautiful places, and amusingly awkward social situations? Well that’s the blend here on the Unreserved Wine Talk Podcast. I’m your host, Natalie Maclean. And each week, I share with you unfiltered conversations with celebrities in the wine world, as well as confessions from my own tipsy journey as I write my third book on this subject. I’m so glad you’re here. Now pass me that bottle please. And let’s get started. Welcome to Episode 188. Which three forces have shaped the evolution of the modern wine market more than any others? What is a wine economist? And how have both the wine industry and wine buyers evolved over the past 10 years and how does that impact the wines you drink? You’ll hear those tips and more in my chat with Mike Veseth, the wine economist who has just published a new book this week called Wine Wars II: The Global Battle for the Soul of Wine. Now on a personal note before we dive into the show with the continuing story of publishing my new wine memoir, Wine Witch on Fire: Rising from the Ashes of Divorce, Depression, Defamation and Drinking Too Much. The two most important sentences in any book are the first and last. The first is an invitation to journey with the author. And the last brings the book to a full conclusion. I also think of the opening line like the spot where the arrow is released. And if the trajectory is true throughout the book, it lands at the end where it should. Here are examples from two of my favourite books starting with Jane Austen’s Pride and Prejudice. “It is a truth universally acknowledged that a single man in possession of a good fortune must be in want of a wife” and then she ends with “they were both ever sensible have the warmest gratitude toward the persons who, by bringing her into Derbyshire, had been the means of uniting them” I just get off fluttery when I read Jane Austen. Alright, book number two is by F. Scott Fitzgerald. It’s his Great Gatsby. And it begins with “In my younger and more vulnerable years, my father gave me some advice that I’ve been turning over in my mind ever since” and the last line is “so we beat on boats against the current born ceaselessly back into the past”. I love the full circle nature of those lines. Now, I’m in no way comparing myself to these great authors, but I did take inspiration from them. With the first and last sentences in the memoir, which starts with I wake to the smell of burning, and finishes with my voice is on fire. Do you have a favourite opening or closing line from a book? Let me know.
I posted a link to a blog post called Diary of a Book Launch in the show notes at NatalieMacLean.com /188. And this is where I share more behind the scenes stories about the journey of taking this memoir from idea to publication. If you want a more intimate insider seat beside me on this journey, please let me know you’d like to become a beta reader and get a sneak peek at the manuscript. Email me at [email protected]. Okay, I’m with the show.
Natalie MacLean 5:52
Mike Veseth is the editor of The Wine Economist newsletter, and author of more than a dozen books, including Around the World in 80 Wines. Money, Taste and Wine. It’s Complicated. And of course, the newly published Wine Wars II: The Global Battle for the Soul of Wine. He’s won many awards for his work, including the Gourmand International Award for Best Wine Writing. He is a professor emeritus of the University of Tacoma at Puget Sound in Washington state where he taught International Political Economy and prior to that, he earned his PhD in Economics from Purdue University. Today, he’s known as the Wine Economist, and he joins me now from his home in Washington. Welcome, Mike. So great to have you back.
Mike Veseth 6:37
Cheers, Natalie. It’s wonderful to be back.
Natalie MacLean 6:40
All right, yes, you’ve been on the podcast before and we’ve talked on Facebook. So you are a repeat customer here. And there’s a reason for that. You’ve got some really, really great stories to tell. So I’m keen to dive in. But before we do that Mike tell us what is a wine economist?
Mike Veseth 6:57
Oh, so if I were to tell you I was a real estate economist, then it would make sense that I would be looking at the supply and demand for real estate and what sets the price and what changes it. Or if I was a finance economist, you’d say, Oh, you must worry about interest rates. And so wine economists are people who analyze the wine industry. So although we seldom refuse an offer of tasting wine, it is that economic backstory about the wine business that is on our mind. Incredibly, there are two organizations of wine economists, there is an American Association of Wine Economists, that meets every year. They’re meeting in Tbilisi in Georgia this summer. And then there’s also a European Association of Wine Economists. So who knew that so many people found the wine business so interesting to study?
Natalie MacLean 7:50
I’ll bet. And these people who meet for these conferences are they mostly academics like yourself?
Mike Veseth 7:55
And the answer is yes. There are increasingly some who work within the industry or people like me who go back and forth, okay, and this, but these are in particular are academic organizations. And so for example, the American Journal of Wine Economics, where research studies are published.
Natalie MacLean 8:14
Wow. It’s like whole subculture. Reminds me of what did they have those conferences where everyone dresses up as their favourite character from an Avengers movie, not that you’re doing anything like that I’m sure it’s a whole lot more serious. But this is a whole other world that we don’t know about. But your insights certainly helped shape the wines we drink. So why were you attracted to this branch of wine or even of economics? Why did you decide to marry the two?
Mike Veseth 8:40
I’ll try to keep the story short. The longer story is that 40 years ago, when my wife and I were still pretty much newlyweds, we took a cheap vacation in Napa Valley. And so that tells you it was a long time ago. Yes. There is nothing cheap in Napa Valley anymore. And on our last day, we had time for one more tasting. We stopped and the winemaker was there. And I tried to ask him my simple amateur questions about wine. But he found out that I am an economics professor. So he began to ask me really serious questions about what was going to happen to interest rates because he had borrowed a lot of money to plant vineyards? What was going to happen to the economy because three, four or five years from now, he hoped to be able to sell his fine wines at a high price. But if the economy tanked, well then you’d have to cut corners and cut costs and so forth. The questions he was asking weren’t amateur and they were very serious. And when I got back to our discount hotel in Santa Rosa, I realised that he had taught me that the things that I study are things that can be useful to people in the wine industry.
Natalie MacLean 9:48
Fascinating. I love that intersection. And oh, for the good old days of a cheap Napa vacation. Holy smokes. Oh well bygones. You publish the first Wine Wars book back in I think it was 2011 but correct me if that’s not right.
Mike Veseth 10:04
That’s right. 10 years ago. ’11
Natalie MacLean 10:05
10 years ago, oh my gosh, and to why critical acclaim I mean, it had raving reviews. And I love chatting about it with you. But in a nutshell, tell us what did this book cover? And where did it leave off? Because it’s going to lead us into your current book, of course.
Mike Veseth 10:20
Oh, so the reason for the current book is that last year in 2021, the 10th anniversary of Wine Wars, I decided it was time in pandemic lockdown mode to get out the book and read it again. And I read through the first chapter and why I really liked this. You’re an author so you know, you read your works over and over and over again. And if you still like it, well, that’s a good sign. That is a really good sign. A really good sign. But I used to tell my thesis students that if they read the theses, and they still liked them by the end, while they had to read them enough. For that, but anyway, they needed more work. But as I read through it, I realized that on the one hand, the world of wine had changed. And on the other hand, I had changed. In travelling around the world for the last dozen years, speaking to wine industry groups, not so much consumer groups except, but that wine industry groups that I’d actually learned a lot and I had some different things that I wanted to say. And so I put together the manuscript for Wine Wars II. And the basic argument in Wine Wars, was the idea that there were three forces shaping global wine, and I gave him what I thought were clever names. But the first was globalization, and globalization as both a creative force and a destructive force. And I gave that the name, the curse of the Blue Nun.
Natalie MacLean 11:46
Okay. And this was in Wine Wars number one,
Mike Veseth 11:48
Wine Wars one because the Blue Nun was one of the first global wine brands. And it both created markets for German wines. But after a while the quality slipped. So it became almost a joke. And now it’s changed hands and it is reinvigorated itself. But it shows the globalization can make you but globalisation can also break you.
Natalie MacLean 12:10
That’s true. It became almost a joke wine at certain points, but they came back, they redid the label and everything. I thought it was less like a frumpy nun and more like Julie Andrews in you know Sound of Music. But they also improve the quality of the wine I think. They did. That’s absolutely key. Which is key. Yes. Because I don’t know if it used to be just a white wine blend. But it went to Riesling I think I’m not sure. But of course, that’s a signature grape of Germany. But it was known as Met tar milch, mother’s milk or something like that.
Mike Veseth 12:40
That’s right, which is I don’t want to offend any German producers, but I think if there’s sort of a kitchen sink of white wine. Sometimes it can be good, but that’s not how you think of it.
Natalie MacLean 12:50
Sure. Absolutely. Yeah.
Mike Veseth 12:52
So then the second force, globalization brings all of these wines to your doorstep. A confusion of wines and an embarrassment of riches, but a confusion. So one way that wine industry deals with that is by branding, and you try to give consumers trust to make that purchase, by giving them a brand that they think they can trust. So this was what I called the Miracle of Two Buck Chuck.
Natalie MacLean 13:14
Ah, and tell us what Two Buck Chuck.
Mike Veseth 13:17
Two Buck Chuck that Fred Franzia wine in the United States that still sells in some places for $2 a bottle. The miracle wasn’t that you can make and sell a wine for $2, because there are economies of scale and doing it, the Miracle is that people consumers who associate low price with low quality and high price with high quality – which isn’t certainly isn’t always the case – t the miracle is that they would buy it. And so Fred Franzi and Trader Joe’s gave millions of American consumers the confidence that they had lacked to try a bottle of wine. It’s just a miracle.
Natalie MacLean 13:56
Awesome. And Trader Joe’s being the grocery store chain in the United States. We don’t have them up here but somewhere between Costco and Whole Foods in the middle there. That’s right. Do you have Aldi stores? We don’t. We don’t have those either. No, but that’s okay.
Mike Veseth 14:09
Because one of the reveals that I have in both books is that at one point, the two brothers that own the German Aldi chain divided up the world. They had a disagreement about whether to sell tobacco products or not. So Aldi north and Aldi South and divided the world and they divided the US. And in the eastern United States, there are I think the Aldi North stores that you will find that are moving across and they’re very successful. And the other Aldi brother bought Trader Joe’s. Ah, okay. And so the Trader Joe’s as you say we think of it is between Costco and something else is a high quality, very high quality. I call it a surfer dude version of German Aldi stores in the United States. People love it people are devoted how I’d like to say that if you had a $2 wine at a Kroger store, you would say, how can it be any good? And if you see a $2 wine at Trader Joe’s, you say, how bad can it be?
Natalie MacLean 15:12
It’s a great way to position it. That’s great. Is that part of the second trend or is that part of globalization?
Mike Veseth 15:18
That’s right, that’s part of the branded goods part. Branded wine. And then those two economic forces globalization pushing wine ahead, branding as a solution to stand out in the crowd. I argue then, and I still think it’s true that then there’s a push back force that meant to oppose the push force. And that’s what I call the revenge of the terroirist, the people who find the commercialization of globalization and the commercialization of branding, they find this threatening to their idea of what they would like wine to be, and so they push back. And these days, this is something that I bring up in Wine Wars II. These days, for example, the natural wine movement would be an example of a push back force.
Natalie MacLean 16:06
Yeah. And let’s just define terroirists. It almost sounds like terrorists.
Mike Veseth 16:10
Sure. So terroir is the idea of the wine should be from a place. Terroir is what was it, Ben Lewin, the wine writer said that it is typical French word he said it is both obvious and mystical, that natural products would be different depending on where they’re grown. So that wine would be different depending on where it’s grown. And that’s the terroir and the terroirists so that people who see this as an important factor.
Natalie MacLean 16:39
Right. okay. And among those terroirists how to get your mouth around that the natural wine, the raw wine. And, you know, again, we’re defining our terms here, but natural, I don’t know what you think of it, as I think of it as low intervention let the wine do its thing, let’s not interfere and that can be for good and bad. Some people find those wines funky. Others find them more natural expression. Raw is kind of I think on that similar spectrum of the winemaker not interfering with the way it’s produced.
Mike Veseth 17:09
That’s right. And I’d see these the natural and raw wine for example, is sort of at the extreme edge of the terroirists but they’re, I think, our mainstream terroir use who simply seek out wines of place where to pick up an example of the people who may never think of themselves as terroirists, I have friends who love Malrborough Sauvignon Blanc, and you know, that’s a distinctive wine. Sauvignon Blanc from the Loire typically doesn’t taste like that. And the both of those places inject a sense of place the fruitiness, the gooseberryness and so forth of Marlborough. The minerality of the Loire These wines that are available everywhere are wines that express themselves their places in that way. And it’s the people who seek out one versus the other while they have a little terroirist blood in their veins.
Natalie MacLean 18:02
Cool. Yeah, no, that’s a great example. So, so much have changed had been a decade, you felt the need to update the book, which I can readily see. So what is Wine Wars II about? You’re still on those three themes, but expanding them with modern examples?
Mike Veseth 18:19
That’s right. Yes. On the one hand, bringing things up to date but also, for example, globalization has changed somewhat. And I tried to look at that both in terms of the supply side of the changing market conditions of wine producers and sellers, but also the changing conditions of retail and wine buying and so forth. So for example, one part that people found very interesting in Wine Wars was looking at the statistical breakdown of wine consumers. What do wine consumers look for? Who are the wine consumers? And how are they changing? And so, among other things, I look at the Constellation Brands studies, which had been so interesting. Constellation Brands, starting in the mid aughts, about 2007 and 2008, they commissioned the Nielsen Company to do in depth surveys of who buys wine in the United States. They call that Project Genome, which is sequencing the wine buyers DNA. So the initial study is sort of divided up into five or six different groups that have different characteristics. Some were more women than men, some bought more wine than other wine. And what was interesting is that Constellation Brands almost immediately began to alter their portfolio of wines to take into account that maybe they were making some wines that were aimed at a market that didn’t really interested in wines and weren’t going to go there. So they began to change. And then they commissioned this again, a follow up study, where they were went one level deeper in it, where the consumers didn’t just tell people what they did but they actually scanned everything that they bought. So that we could actually not just see what people say they like but what they actually purchased, which is, it’s really the gold standard of a survey like that. So this one breaks it down. And then one more iteration of it that captured some more of the Millennials, for example, right, and the younger people. And so this gives us sort of a rich idea that there isn’t a wine consumer. But gosh, there are a lot of people who react in different ways to this embarrassment of riches of wines that is presented to us. It’s a lot of fun.
Natalie MacLean 20:41
Yeah, that study sounds like it really dug deeper than just purely demographics and got into psychographics. So not just women ages 40 to 60. But you know, people who tend to purchase the frequency or whatever, which may, as you said, have a mix of factors.
Mike Veseth 20:57
Yeah, that’s right. And Constellation, once again, has shifted its wines. You know, it’s sold off a lot of its portfolio to Gallo, you’re right, for example, you’re right. And this was part of reconfiguring itself, to focus on what they saw as the most profitable and highest growth and part of the wine market.
Natalie MacLean 21:16
That is interesting, because they sold off a lot of major brands like Ravenswood. And they weren’t brands that I consider to be low end. But I guess just on a balance sheet basis, they weren’t profitable, as you say.
Mike Veseth 21:29
It’s focusing on, you know, there are some businesses where they say, I want each of my products to be in the top three globally. And if it’s something that’s only number five globally, well, I’m going to sell it so that I can focus on the ones that have the highest potential impact. And so for example, Ravenswood, which I think is over the years that’s been a reliable Zinfandel, I’ve enjoyed that terrific one, but the Prisoner right, you can see the Prisoner with that much higher selling point. And so the Prisoner actually I have a chapter now in Wine Wars II where I look at the development of brands. And I sort of plot through some of the most powerful brands over a period of time and the Prisoner is one of them that I analyze.
Natalie MacLean 22:15
The Prisoner was in a creation of these studies, like did they create that brand based on these studies?
Mike Veseth 22:20
And the answer is no. Okay. Prisoners started with Dave Phinney who is a famous winemaker really well known for creating his own brands and so forth. You’ve seen the label of the Prisoner?
Natalie MacLean 22:33
I’ve tried it. Yes. Yeah.
Mike Veseth 22:35
Yeah. Yeah. And you know, the label shows a Goya print that shows this contorted person. It’s a really uncomfortable looking image on it. And it was called The Little Prisoner. And I guess when Dave was 12 years old, he asked for and received a copy of this Goyer print for his birthday.
Natalie MacLean 22:55
What a bizarre child.
Mike Veseth 22:58
We all have dark moments, and maybe he saw something out of it. He created this wine and put that label on it. And because he spins off brands. After actually having a good run, critical acclaim, good sales, he wanted to focus on something else so he sold it off to a Napa Valley Wine family. And they built the brand some more, and then finally sold it off for hundreds of thousands of dollars to Constellation. And what was interesting in that is that they didn’t sell vineyards because all of the grapes were contracted. They didn’t sell a winery because it was made in a custom crushed facility. What they sold for hundreds of thousands of dollars was the intellectual property of the brand. Wow. Now Constellation has associated that brand with some of their own vineyards. They’ve actually built out a winery and tasting room so you can there was one of them was actually a wine, a different winery before. And you can now go to Napa, and you can visit the Prisoner. And I think you have sort of a lock up experience. Oh, really? Yeah.
Natalie MacLean 24:11
I guess we don’t know because people visit and they never come back.
Mike Veseth 24:14
and never come back.
Natalie MacLean 24:17
I’ll bet you it must be a beautifully designed winery. If they’re keeping on brand.
Mike Veseth 24:22
Oh yeah, they are there. And then of course, they’ve spun off some other brands that go with it. We recently saw if I forgotten the name of a no but a sort of $20 tier wine that goes with it. And then they have this wine Saldo S A L D, which is a Zinfandel. It’s there. So anyway, and then interesting how brands get built. In this same chapte,r I have a section that I call Welcome to the Brand Factory, because I discovered that there are businesses that are there, Natalie, if you want to create your own Natalie Maclean wine, they are there for you. They will design the label and the packaging. They will source the wine from anywhere in the world. They seem to have connections, especially with cooperatives all around the world. So they can have the wine made to your specification, have it bottled, have it packaged, have it marketed.
Natalie MacLean 25:20
This must be how celebrities often get it done to.
Mike Veseth 25:23
That’s right. Yeah. So there are factories now that do this. It’s I will say it’s out of control. But it’s the part of the wine business that we don’t see when we stand at a wine shop and look at those attractive labels.
Natalie MacLean 25:35
So with all of this brand building and brand making, do you think that is losing in those wines in the creation of those brands, Is wine losing its soul? Is that what you’re getting at for that?
Mike Veseth 25:47
Well, it certainly risks losing a soul. Because it becomes about the imaging more than the wine itself. It becomes, as you say, with at least some celebrity wines, I think are good wines. And some celebrity wines are just about the celebrity. And it could be from anywhere. It could be made by anyone. It could come out of a big tank, but it might be made in a very. I actually got into trouble a couple of years ago. Gérard Bertrand is famous in France as a winemaker. But also he’s even more famous as a rugby player. You know, he played on the national rugby team. And so he’s a big guy. I’m not a small guy and he’s bigger than I am. And so I came up to him and I said, you know, Gérard, when I first heard about your wines, I thought that that this was just celebrity wine just could be from anywhere. And he rose up. But of course, then I tasted the wines. And this was an honest thing. And many of the wines are so expressive of place. There were some of the very best wines that I had had when we toured through the south of France. And he had done so much to preserve.
Natalie MacLean 26:54
Yeah, he does know.
Mike Veseth 26:57
So you got to be careful you talk to a celebrity about wine.
Natalie MacLean 27:00
It just like gets taken down, literally. But yeah, he really also focuses on the different pockets of land within the Southern French region. I mean, it’s huge, but he will name different regions on his label. So he is very much about terroir and place.
Mike Veseth 27:17
He is. He absolutely is. And then of course, he makes the wine for that Diving into Hampton winery.
Natalie MacLean 27:24
Hampton water. Bon Jovi? Yes, that’s right. So he does do a celebrity wine.
Mike Veseth 27:29
Yeah, so he makes a wine for them. So he has his toe in the celebrity wine business, too.
Natalie MacLean 27:34
It’s true. He’s got it both ways. But that Rosé is beautiful. It may be a celebrity wine, but it is one of the ones I think that is well made. But just one more question on the Constellation studies. As a result of this whole genome, did they create a brand? Like they sold off brands and so consolidated their businesses? But do you know, to your knowledge, did they create a brand that was suited toward this new genome type that they discovered?
Mike Veseth 27:59
To be honest, No,I don’t think they did. I think what they did is they found other brands that they believe were under invested. Brands that they thought that they could build up to, for example, I’m located here in Washington State and Charles Smith of Kung Fu Girl Eines, for example, is located here and not so far. The main wineries not so far from here, actually, and this is the Charles Smith wines are wines that they looked at and they said you know, Charles Smith has been very successful. But we can be even more successful, building out these lines of Washington. Rieslings, Merlot and Syrah. So they came in and once again, they paid hundreds of thousands of dollars to Charles Smith. And it’s not for the vineyards because the wines are made with grapes from some of the same vineyards as before contract vineyards and not for the winery, because the contract winery that was there, but for the brands that they thought that they could make even more successful than Charles Smith has. Wow.
Natalie MacLean 29:01
And what’s one of the most successful brands you’ve seen recently? Maybe you talked about the Prisoner. Is there another one that comes to mind? It doesn’t have to be Constellations’.
Mike Veseth 29:10
So it’s not sort of globally successful, but in terms of being very successful at doing what it wants to do. There is a brand that comes from Red Mountain in Washington State. I write about it in Wine Wars II It’s called Secret Squirrel.
Natalie MacLean 29:27
Okay, how’d that come to be?
Mike Veseth 29:29
On the label, it has a cartoon of a squirrel in a party mask like this. You know, and you’ll look at it just oh, you know, it sells for about $25 to $30 in this. And it’s secret squirrel. This the wine is excellent. The over delivers for the price. But the brand was created to appeal to Millennials, to people who are maybe on the weekend they’re not going to have wine every night of the wine on the weekend, they’re very happy to have a little more expensive bottle of wine than they might have if they were to do that. They don’t take themselves too seriously. So they don’t want wine that takes itself too seriously. Everybody loves secrets, who can resist a squirrel? So there were some designers and marketing people involved in creating the brand. But actually I know the winemakers pretty well, they didn’t cut any corners to make the wine. They use the state grapes, for example, to make it. And so this has been very successful and after the owner told me, well, this is why we did all this. I was walking down the street in Walla Walla, Main Street in Walla Walla. Washington. I looked around and sure enough, there were tables out on the sidewalk of young people with bottles of Secret Squirrel that they were enjoying. You know, they really did. It’s in the same way that a very successful wine is that Australian wine 19 Crimes.
Natalie MacLean 31:00
Oh, yes, that’s been a huge marketing thing. Like it’s got holograms and the stories of all these Prisoners. And so does it exist? Or is it just a virtual brand as well?
Mike Veseth 31:10
Oh, you know, it does exist. It’s made by Treasury Wine Estates in Australia. But it was created specifically to be attracted to Millennial males.
Natalie MacLean 31:21
Mike Veseth 31:23
You’ve tasted it. To my palate, I’m an economist, not a wine taster. But to my palate it’s kind of sweet and tannic. Yeah, it is sweet. I joke but it’s not a joke that I liked it better on ice. And that maybe on crushed ice would be my preferred way to drink it but I mean, I’m not suggest anyway. And the marketing there the 19 Crimes we think about young men, maybe young men who say I don’t need no stinking badge. I don’t need no stinking Wine Spectator to tell me what to drink. You know. So I want to break the rules a little bit. And here’s the sad man on the label. This sad prisoner. Are we feel sad sometimes not as sad as the prisoner. You know, contorted now. But it was actually had been very successful. I gave a talk about this. And a woman came up to me afterwards and says we don’t when I go to parties with my boyfriend, it does seem like those young men are drinking that wine all the time. That 19 Crimes.
Natalie MacLean 32:20
Yeah, they have some women on the label now too. I guess they’re trying to expand into Millennial women.
Mike Veseth 32:25
That’s right. The Chardonnay was the first one of that. And I guess Snoop Dogg. Martha Stewart.
Natalie MacLean 32:32
That’s I’ve heard is a good one. I haven’t tasted it. Her Chardonnay. People are saying it’s actually a good Chardonnay. Have you tried it?
Mike Veseth 32:40
There’s no reason why it shouldn’t be. Yeah. Well, especially with her.
Natalie MacLean 32:43
She cares about her brand.
Mike Veseth 32:45
I think she has some experience as a prisoner.
Natalie MacLean 32:48
So it’s an authentic story. You’re right. Yeah, I wasn’t putting that all together. But yeah, it’s kind of like a bit of a winking nod to her total experience, branding and prisoning, whatever. But that is incredible. So in terms of Wine Wars II, what else has changed in the last 10 years? You’ve talked about the branding, what else is coming to the fore in this book?
Mike Veseth 33:13
In the end, in the part where I talk about the revenge of the terroirists. One of the things I do is in the in each of my wine books, I ended up talking about China at some point because I just fascinated with China and what’s going on there. And so I have a chapter that’s now called Silk Road Terroirists, that when we visited Georgia, the Republic of Georgia, that just Georgia, there was just a lot of Chinese investment that was going on because it was part of the belt and road programme that Georgia signed a free trade agreement with China that there are over 300 Georgia wine houses in China where Georgian wine is sold along with Georgian culture and sort. So there’s a surprising link there. And so I tried to use that link to think about are there any terroirists and China with so and so. So to make a long story short, Georgia is sort of the ultimate terroirists place because not only does everybody drink wine, but almost all families make their own wine.
Natalie MacLean 34:19
Yeah, and it’s the seed of ancient winemaking too with the clay vessels and the whole orange wines and all the rest of it.
Mike Veseth 34:27
Exactly right. Exactly. So goes back 6 – 7 thousand years. The kavairies are still being used. We would visit in the fall and as we drove to the airport, the gas stations and stuff by the side of the road, we’re selling huge Flexi tanks, big Flexi tanks for home wine production using that same kind of technique. It is interesting that so much wine is made and consumed at home that it’s actually hard to sell wine in Georgia, because you’re competing with grandpa’s wine or uncle George’s wine are my friends in Georgia are often named George. So anyway, they’ve had good success. So that if there are terroirists, Georgia probably is a good place to look. So I went looking for terroirists in China, and of course, on the one hand, you’ve got some sort of problematic ones. There’s this Chinese wine you’ve tasted oI’m sure Ao Yun. Oh, I haven’t actually know Ao Yun is actually made in Shangri La. It’s made in the Tibetan foothills at elevation of about 7000 feet out. It’s made by Moet Hennessy of Louis Vuitton Moet Hennessy. Sells in the US., for about $250 a bottle. Holy smokes. It reflects some of the highest mountain vineyards in the world.
Natalie MacLean 35:46
Wow. Is it made by Tibetan monks?
Mike Veseth 35:49
No not by Tibetan because it’s a French project. I told the story in the book about two friends of mine who went looking for it. And they got there, they couldn’t get into the winery. And they were so disappointed because the winery is not set up. It’s the end of a go track more or less winery is not set up for visitors or anything like that. It’s just a production facility problematic because of anything that’s going on. Well, not literally at the end of a go track. But it was apparently a huge challenge to build out. The vineyards in that area had actually been established by French priests a hundred years ago, and nurtured along those lines, but they had to build out winery with the cooperation of the local government. Of course, you always is the case in in China. So my friends, when I tried to get into wine, we were so disappointed. So they got directions to a little guesthouse. And dusk was falling. The lights had gone, they opened it up. And there were friends from Australia, and Argentina and France. It was this homecoming for them, because they were all there working on the project. At that point, I wonderedwho is Chinese wine for? Is Chinese wine for the Chinese, or is Chinese wine for this global audience. It reflects its terroir. It certainly does have a distinctive acidity. It’s a nice mountain wine. So maybe there aren’t terroirists in China. But then there are other wines. Briefly, I sort of look through three different wines that I’ve been able to taste over the years that were make me believe in Chinese terroirists. The last one was Shanxi from Grace vineyard. Is this in China? Grace vineyard in China. It was one of the very first quality wine producers. In Wine Wars, I talked about how they were able to make so much better quality wine in China than before. The very first Chinese wine I had – I won’t give the brand name – but I’ll give the tasting note. ashtray coffee ground and urinal crust. Oh, dear. Because it had enormous volatile acidity. Yeah, a group of us tasted it. And we had to taste it again. And again, because we just couldn’t believe it. Wow. And then I tasted one of the Grace Vineyards wine. And wow, you know, it was terrific. And we because Judy Chan and her family were able to actually take control of the vineyards and to produce quality grapes. And of course, quality grapes is quality wine really begins. And so Marsolan
Natalie MacLean 38:28
For Chinese wine, I guess it is problematic these days, given all the economics and politics and human rights issues. So do you think that the Chinese are just making the wines for themselves? Or are they really wanting to export?
Mike Veseth 38:42
Well, at this point, I think that there are some attempts at export. And if you’re in Paris or in London, you’ll find more Chinese wines than you will find here. I can find a few Chinese wines at Asian markets, for example, but really the potential domestic market is so big. That that’s where they’re thinking the investment is that way. And as China comes out of the lockdown, it’s seems like I’ve heard very recently that Chinese consumers are turning more toward their own wines. The Australian wines are kept out now by the huge tariffs. They have over 200% tariffs on Australian wines. French wines, France is number two. Chile is number one right now. They’re going there. But consumers are are beginning to think about supporting their own wine industry even more, which I think is terrific.
Natalie MacLean 39:36
Sure. Yeah. And that’s part of terroirist as well like that you drink local.
Mike Veseth 39:40
Drink local. And I think that there are distinctive flavours that are appropriate to China that are familiar to Chinese that maybe aren’t familiar to Americans or US or Canada or Europeans. And so I I’d love to see a wine industry develop along those lines.
Natalie MacLean 39:56
That’s terrific. Well, there you have it. I hope you enjoyed my chat with Mike. Here my takeaways. Number one, I found it interesting how globalization at one end of the spectrum and the terroirists at the other end, are having a profound impact on the style and type of wines we drink now. Two, Mike gives us great insights into what a wine economist does. And three, the wine industry and buyers have changed so much in the past 10 years. In the shownotes, you’ll find my email contact a full transcript of my conversation with Mike, links to his website and books, and where you can find the live stream video version of these conversations on Facebook, and YouTube Live every Wednesday at 7pm. You’ll also find a link to my free online class called Five Food and Wine Pairing Mistakes that can Ruin Your Dinner, and How to fix them Forever. That’s all in the show notes at NatalieMacLean.com/188. Email me if you have a sip, tip ,question, or want to be a beta reader of my new memoir at Natalie@Natalie MacLean.com. You won’t want to miss next week when we continue our chat with Mike. In the meantime, if you missed episode 21 go back and take a listen. I chat about whether wine is the source of civilization with author John Mahoney. I’ll share a short clip with you now to whet your appetite.
Unknown Speaker 41:28
What was the first person that made wine? I was taught that civilization has established itself from say Babylon or Egypt. We go back to the time of Christ. That’s 2000 years everything else is BCE, and everybody thought that wine was 3000. Then they say well, no, it’s probably four even 5000 years old. But two places established it that that was incorrect University of Toronto and the University of Pennsylvania. Both of them had research and found out that is well over three, four or five thousand years old a proven and actually have done scientific testing to prove that wine production is probably seven and a half to 8000 years old. Wow. My research took it further and I’m saying that we started with wine right after the last ice age.
Natalie MacLean 42:17
If you liked this episode, please tell one friend about it this week, especially someone you know who be interested in the wines and stories we discussed. Thank you for taking the time to join me here. I hope something great is in your class this week. Perhaps a wine from a region you’ve not tried yet.
Natalie MacLean 42:40
You don’t want to miss one juicy episode of this podcast, especially the secret full body bonus episodes that I don’t announce on social media. So subscribe for free now at NatalieMacLean.com/subscribe. Meet me here next week. Cheers.