Saturday, March 18, 2006

French Lesson

An unpalatable prescription for the French wine industry

The following article appeared in the April 2006 edition of Wine & Spirit magazine

This is, to put it mildly, not a great time to be a French winemaker. Various speakers at the annual Wine Evolution conference in Paris in January revealed how French wine was being hammered into the ground across the globe by Australia and New Zealand. But the low point in the sad litany of statistics came when the figures for Canada appeared on the screen. Shipments to Quebec, traditionally one of the most pro-Gallic areas of the world, fell by over 35% last year. It was as though some of George W Bush’s supporters had begun to wonder whether there was something to be said for the Taliban after all.

Falling sales overseas and at home have finally forced France’s winemakers to wake up to smell the coffee – only to discover that the bitter black aroma they understand has been supplanted by something a lot more like a Starbucks skinny latte. And the experience has created widespread confusion and despair. In Burgundy a grower with vines in the Cote d’Or – and a cellarful of stock – asked a British visitor in bewilderment, “what are we to do…? It’s not as if we’re railway workers who can go on strike to get what they want”.

Within France, supposedly serious proposals include a suggestion that the government to take responsibility for wine sales and marketing. More usefully, there is a serious acknowledgment of the need to cut production – by uprooting vines and limiting yields – and to improve quality – by imposing appellation controlee rules more rigorously. In Languedoc 12,500ha, of vines have already been torn up, while the figure – so far – for Bordeaux is 1,800ha. But simply focusing on quantity and quality is rather like approaching a cancer patient with a sharp knife and a packet of sticking plasters.

Vine-pull schemes, like factory closures and forced redundancies, certainly help to cut excess production, but they don’t solve thornier problems such as why decent, inexpensive Sauvignon Blanc from Bordeaux is a drag on the market while sales of pricy New Zealand Sauvignon are flying into the stratosphere. Which brings us to the question of quality. How is anyone to define what is and isn’t a “good” wine? Ask most French – and many British - critics to judge between a typical, noticeably tannic, gently acidic claret and a soft, slightly (or more than slightly) sweet, branded Aussie Cabernet and they’ll go for the Old World wine. Then offer both bottles to a consumer almost anywhere and you’ll get a very different response. Ask most Frenchmen why their country is currently one of the most profitable in the world for McDonalds – and why you can’t drive through the city of Bordeaux without passing at least three sets of golden arches.

Simply making less of the same wines better will not solve France’s problems. Some French wines – from Muscadet to basic red Bordeaux - just don’t suit current tastes. Kodak could have gone on improving its black-and-white film, but that wouldn’t have helped much in a world that has switched to digital colour. Black-and-white film no longer features on its Kodak’s menu, but it will happily sell you a digital camera or paper on which to print out your pictures.

That kind of pragmatism is not available to France’s wine industry. A winegrower in an appellation region like Bordeaux or Burgundy can’t significantly change the style of his wine – or launch a new one – as legally he might in Italy. And even if he were to persuade his neighbours that the appellation rules should be amended, nothing can happen until an official in Paris has applied his rubber stamp. And, that can be stopped by lobbyists from other parts of the country. So, when Jean Thevenin wanted to produce a sweet wine in Macon Clesse, his efforts were blocked by producers in Sauternes and the Loire. And when Bordeaux tried to create a Vin de Pays for itself, the plan was sabotaged by the Languedociens, who feared moustache-twirling competition for their Vins de Pays d’Oc.

We live, whether we like it or not, in an age where the brand is king. According to a recent Dutch study of 200 children reported in the Journal of Applied Developmental Psychology, most two-to-three year-olds recognized eight out of the 12 logos they were shown. While France’s winemakers have busied themselves creating ever more obscure appellations and rules, the New World has been building brands. While the Gallic philosophy has been that it is up to the client to learn to understand its labels and appreciate its styles, Antipodeans and North and South Americans and even some other Europeans have been simplifying their packaging and flavours. It is no accident that Yellow Tail (120,000,000 bottles sold globally last year) has a striking label with colour-coded capsules for the different grape varieties – and 10 grams of sugar per litre in the reds (compared to the paltry one or two grams that are commonly found in basic Bordeaux). Of course, French producers can quite reasonably say that they don’t want to compete with wines like Yellow Tail. The only problem is that, across the world, these and other branded New World wines are the ones whose sales are growing fastest. In Britain, the top four best selling brands are seeing growth of 48%, while unbranded wines are standing still or sliding backwards.

But surely, the French would argue, our appellations are our brands. The notion of the appellation-as-brand has four drawbacks. There is the obvious risk that in any region, the lowest common denominator will potentially spoil the game for the higher quality players. In France, Jean-Marie Chadronnier of Dourthe freely admits that selling his Dourthe No 1 Bordeaux Blanc is made more difficult by the generally poor reputation of white Bordeaux.

Even if the quality issue were resolved at a stroke, there would be the small matter of stylistic consistency. Penfolds fans know what to expect from wines bearing the Penfolds label; In France it is impossible to know whether a Vouvray or Alsace Gewurztraminer will be sweet or dry.

Brands need skilled management and marketing – and often quite substantial budgets - if they are to survive. And there is a limit to the number of brands a market can sustain. If, as has been predicted, General Motors goes bankrupt this year, the finger of blame has already been pointed at its plethora of ill-focused brands.

One of the reasons most supporters of the French appellation system give for its maintenance, is that other countries are busily setting up similar designations of their own. They are missing the point. In the New World, appellations are optional - garments to be worn or discarded at will, rather than the straitjackets favoured in France. But far more crucially, many of the newest appellation areas are facing the same problems as their counterparts in France. British supermarket shoppers are no more aware of Mudgee or Mount Benson than they are of Madiran and Montravel.

The situation of French wine today is horribly reminiscent of the British motor industry of the 1970s and 1980s. Despite an illustrious history and the global prestige of names like Rolls Royce, Bentley and Jaguar, a badly run industry, riven with disputes and featherbedded by the taxpayer was making a confusing array of cars too few people wanted to buy or drive. Rescue of a kind, came in the form of investment by Japanese manufacturers who listened to their customers. Today, Britain has become very good at making Japanese cars. What if a similar fate awaited France?
Today, the fastest selling French wine in the US, with sales of over 250,000 cases, is a Vin de Pays d’Oc called Red Bicyclette. It was produced and launched in 2004 – after extensive consumer research – by E&J Gallo.

So what is France to do?

The recipe in 12 parts

1) Teach France’s wine producers to listen to their customers.
Establish an annual bursary to send 2,000 young French men and women to work for 6 months in wine retailers and (non French) restaurants throughout the world. Learn from the successes foreigners have had with French brands like Fat Bastard and Red Bicyclette.
2) Introduce a national vine-pull scheme.And link it to a staged removal of state subsidies (see below). In other words, people who refuse to take advantage of a payment today know that they will have to fend for themselves in the foreseeable future.
3) Allow multi-regional blends that are subject to the same restrictions as in the New World.
In other words, if Pernod Ricard want to make a French version of their Jacobs Creek by blending grapes from the Loire, Bordeaux, the Rhone and Languedoc Roussillon, give them the total freedom to do so. And if the customers for those wines want them to be sweeter than is traditional in France, don’t stop them from applying the Australian technique of adding a little concentrated grape juice.
4) Make appellations optional
Where producers choose to sell their wines under local or regional appellations let them do so, but if they prefer to offer wines under a broader designation – as is now common in Italy - don’t stand in their way. And stop allowing growers in one region from preventing their counterparts elsewhere from defining their own styles.
5) Remove all restrictions on varietal labeling
Stop the ludicrous inequalities that allow Bordeaux producers to print Sauvignon on their whites while preventing Minervois from printing Syrah on its reds.
6) Remove all rules on yields and irrigation
Water is a valuable resource. Meter it and charge winemakers if they want to irrigate their vines. But don’t ban the practice. Allow the market to decided what is and isn’t overcropped and/or over-irrigated
7) Remove the distillation regime
Take away the safety nets that allow producers to receive government money for excess wine. Unsold wine should be treated in the same way as unsold bread and cakes.
8) Remove Paris from the equation
Allow producers and regions to run their own affair. Study the Australian model and remove all unnecessary red tape.
9) Provide loans to cooperatives to encourage them to develop and merge.
France’s cooperatives are the biggest hope for its wine industry. Today some 870 of them produce just over half of the country’s annual harvest. Most of it is poor to average and little of it is branded, but a exceptions to the rule like Nicolas Feuillatte and Jacquart in Champagne, La Chablisienne in Burgundy, Wolfberger in Alsace, Plaimont in the South West and Val d’Orbieu in Languedoc all show what could be achieved if these businesses were properly run. The recently-launched Blason de Bourgogne, a brand jointly shared by four cooperatives, also demonstrates how old regions can play the same games as the New World.
10) Remove the focus on vintages for more basic wines
Modern consumers want consistency. Encourage the kind of inter-vintage blending (up to 15%) that is done in other countries to produce attractive commercial wines
11) Subsidize wine tourism.
Compare the Hunter or Napa Valley with the Medoc and Cote d’Or and it is clear that very few lessons have been learned from the New World. How many wineries have restaurants or cafes? How many have shops? How many offer safe playgrounds or picnic areas? In a world where retailer’s shelves are shrinking wine tourism may be the only hope for small producers. The Champenois, Duboeuf with its visitor centre in Romaneche-Thorins, Olivier Leflaive with its restaurant and Mouton Rothschild with its museum all show the way, but these are exceptions to the rule…
12) Create a national research centre and improve education
Plenty of claims are made for the quality of research in France, but there is little evidence for it taking place on a national or regional basis Where are the studies on different kinds of closure? Of irrigated versus non-irrigated vineyards? Of different clones of grapes like the Petit Verdot? Copy the Australian model of the Wine Research Institute, and levy money from producers to fund it properly. Teach wine business. Teach winemakers how and why to build up mailing lists and how to increase their direct sales. Launch courses covering packaging and marketing, including lessons on what works best in specific markets.

And if all of this seems too tough, I have a radical alternative that President Sarkozy might care to consider: threaten Lous-Vuitton-Moet-Hennessy with nationalisation unless it takes over the entire industry, possibly in conjunction with Pernod Ricard and Castel. The firms that manage brands ranging from Cloudy Bay and Jacobs Creek to Moet & Chandon and Krug couldn’t do a worse job than is being done today.


A teenage girl watched her mother cutting up a ham before putting in the oven. Why, she asked, was the meat always cooked in two pieces. Her mother replied that everything she did in her kitchen had been passed down from her own mother who had routinely cut the ham in half. Still curious, the girl raised the question with her grandmother – who said that she too had simply followed the family tradition. Fortunately, the great-grandmother, a sprightly woman in her early nineties, was still around to provide the explanation. “Oh, there’s no mystery” she said. “We never had a dish big enough to accommodate the whole ham”.

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