Mike Veseth - Wine Wars: The Curse of the Blue Nun, The Miracle of Two Buck Chuck, and the Revenge of the Terroirists

It was the best of wines, it was the worst of wines (apologies to fans of Charles Dickens). The global wineglass it seems is both quite empty and full to the brim.

We live today in the best of times for wine if we evaluate the situation objectively as economists like me are trained to do. Never before has so much good wine been made and so many wine choices offered up to consumers. For someone who loves wine, the glass is very full indeed; it is hard to imagine better days than these. The global markets deliver a world of wine to your door. Drink up!

And yet many enthusiasts are anxious about the future of wine. The good news we find in our wineglasses and on the supermarket shelves is often accompanied by disturbing rumors, feelings, and forecasts.

It is the worst of times, too, you seeespecially if you are a maker of cheap wine in France, Italy, or Spain, the largest wine-producing countries. Everything about wine is wrong for you. Consumption is falling, squeezing your market share, and import competition has increased. You find yourself making the wrong wine in the wrong style from the wrong grapes at the wrong price and trying to sell it in the wrong markets. You are betrayed at every turn by the markets that once treated you so well, and now betrayed as well by the European Union, which once bought up your surplus wine lake and now tells you coldly to grub up your worthless vines. You hold an empty glass, or so it must seem.

Times are troubling in Australia, too, where a wine boom has been followed by a wine bust as consumers around the world have seemingly turned away from the muscular Aussie wines they enjoyed so much just a few years ago. Recession, falling consumption, rising antidrinking lobbies, water shortages, global warming, and even raging brush fires all threaten the livelihoods of winegrowers and producers in many parts of the globe.

It is the worst of times for consumers, too, or so it is said, if they seek that special taste of a place that wine geeks like me call terroir . The wine in your half-empty glass is free of any technical flaw, but so what? Does it have a soul? Does it express any particular place or any producers distinct vision of what wine should be? This is the age of McWine, I have heard people say: wine that is all the same. When everything is the same, then it is all nothing! And whats worse than that?

These are good times and bad ones, too, for the world of winewhat a contradiction! What about the future? Will wines tale of two glasses have a happy ending? Or will our (excuse the pun) grape expectations be crushed? Im an optimist about the future of wine, but as an economist I am trained to pay close attention to the dismal side of any situation. I wrote this book to try to find out just how empty or full the global glass really is and how the world of wine is likely to change.

The first thing to understand about wine is that it is many things, not just one, both in terms of wine itself and the economic forces that drive the wine industry, so the story of the future of wine will necessarily be a complicated one. Although hundreds of particular factors will come into play as the wine world evolves, three big forces will almost certainly shape the overall pattern: globalization, Two Buck Chuck, and the revenge of the terroirists. Globalization and Two Buck Chuck are economic push forces that are transforming the world of wine. The revenge of the terroirists is all about pushing back, but with a twist because global climate change is going to force us to change the way we think about terroir .

Globalization: Redrawing the World Wine Map

Globalization comes first. It isnt something new, as we will see, but it is a powerful force that is becoming even stronger. It is quite literally redrawing the world wine map, pushing it out from the Old World where most of the earths wine is still produced to many New Worlds where both production and consumption are on the rise.

Wine has become a global or nearly global phenomenon, produced in a growing number of countries and widely consumed (except where religious edict forbids it). Most wine, however, is surprisingly local, produced and consumed in the same country and often the same region. There is enough wine traded internationally, however, to provide wine consumers with the impression of complete globalization.

Ironically, the most global wines live at the top and bottom of the wine wall, my name for the various real and virtual spaces where wine enthusiasts (as demand) confront the vast and often confusing supply of available wine. The top shelf holds Champagne, of course, and iconic wines that can sell for hundreds and even thousands of dollars. These wines travel the world, reaching collectors, investors, connoisseurs, and upwardly mobile wine snob wannabes wherever they live. Asia is a hot market for these wines just now, but really they end up everywhere.

The bottom shelf of the wine wall holds inexpensive generic wines that can sell for as little as two dollars in the United States. In the European Union you can get a liter of this wine for a single euro coin (VAT included). Some of these wines are packaged in traditional 750 ml bottles, but most of them come in other sorts of packages1.5 liter bottles, foil-lined cardboard tubes that look like exaggerated juice packs, and 3 and 5 liter casks of wine, cardboard boxes containing special plastic bags. You get to the wine through a spigot, not by pulling a cork, with these box or bag-in-box wines.

Whereas status and prestige pull iconic wines to the four corners of the globe, cost concerns drive the generic wine trade. Cost is key on the bottom of the wine wall and there is always cheaper wine somewhere in the world. With the advent of efficient bulk wine shipping (huge bags of wine in huge ocean shipping containers) even relatively small differences in price can unleash tidal waves of wine. Thus cheap wine in China (some of it even labeled Chinese wine) makes a long journey from Chile while the Pinot Noir sold by a California-based brand might come from the South of France, Northern Italy, Chile, or somewhere else. Its a small world after all down there on the bottom shelf.