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Some lessons learned from the first decade of the 21st century

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Hard to believe in just 37 days the first decade of the 21st century will end. Seems like only yesterday we were partying like it was 1999 (wait, it was 1999) and in a panic about the Y2K meltdown. Now here we are on the verge of 2010. In the blink of an eye, a decade has flown by.

It’s been ten years of discontinuity and discombulation for everything in America, and that includes the wine industry. I went back to review some things I wrote for Wine Enthusiast back in 2000, to see what we were thinking and talking about then. The wine market was, of course, robust in 2000, coming off the previous decade of up, up and away. In August of that year I wrote a column that reflected on the historical swings of the Bordeaux market over the preceding, well-documented two centuries. “Switch now from Bordeaux to California, and especially Napa Valley,” I said. “Many of the top wines, particularly Cabernet Sauvignon, have doubled in price since 1990…the price of many, if not most, expensive wines has got to come down, and will…If you don’t believe that the world’s most prestigious wines can suddenly, exuberantly collapse in price, just read ‘The Wines of Bordeaux’ and find out.” That book, by Eddie Penning-Rowsell, traces the sine curves that Bordeaux prices always have described.

The dot-com bust and Sept. 11 dealt blows to the wine industry, but nothing like the staggering knockdown that the Great Recession of 2008-2009 delivered. I still see “suggested retail prices” of $100, $150, $250 for certain Cabernets, but frankly, I don’t believe them. A winery owner can claim to be asking (and getting) triple-digits for his wine but that doesn’t mean he is. So I was right that prices would collapse, but it’s a prediction anybody can make, at any time, because sooner or later, prices always tumble. But that has never stopped certain people from trying to talk prices back up, as for example this article from Investors Chronicle, which argues that “the market for quality wine has enjoyed a rapid turnaround” and cites somebody from something called The Wine Investment Fund as saying that fine wine “has earned it[s] place alongside gold, equities, bonds and other assets in an investment portfolio.” We may forgive The Wine Investment Fund, which is based in London, Bermuda and Hong Kong, for hyperbole, since it’s hardly a disinterested party.

I asked, also in a 2000 column, the following question: “Have you noticed that wine is getting sweeter and softer?” Apparently, I had, although 2000 was a little before I remember actually becoming convinced that California wine had a real problem, namely lack of acidity and excessive residual sugar. Later that year I wrote a little story about Jess Jackson stepping down as Board Chairman of Kendall-Jackson, and quoted him as saying, “I’m seventy. I’m retiring.” Some retirement! But along less happy lines, at the end of 2000 I reported on the news that Robert Mondavi Winery had “extended its reach to a fourth continent, Australia,” with its announcement of a joint venture with Rosemont. In retrospect we can see that this really was an early warning sign of the winery’s impending demise, caused by the hubris of exalted ambitions. RMW’s actual death dragged on for another four years, but finally occurred in December, 2004, when the company was sold to Constellation.

Several conclusions can be drawn. Wine prices are down now, but unless this is the End of History they will rise again, pace Penning-Rowsell, although it could take a while for the high end to recover; there were eras when Bordeaux took decades to come back. Softness and sugariness remain stubborn problems in California wine, but there’s evidence that that trend-line has peaked, thankfully (although it’s a Dracula that threatens always to rise again from the grave). Jess Jackson happily remains with us, at the helm of a great wine company. And the unhappy experience of Robert Mondavi should be a warning sign to ambitious empire builders. What are its lessons? Be careful what you wish for because you might get it. The Devil’s in the details. The bigger they are, the harder they fall. Dot your i’s and cross your t’s. The fundamentals still apply as time goes by.

casablanca-splash

And speaking of the second decade of the 21st century

The world will have heard by now that Gary Vaynerchuk has won Wine Enthusiast’s “Innovator of the Year” Wine Star Award for WineLibrary TV. I am personally thrilled by the prospect of finally meeting Gary when we all gather, in black tie, at next year’s gala ceremony, at the New York Public Library’s 42nd Street branch. I feel like I know Gary from his comments on my blog, and he is obviously a force to be reckoned with as we head into the two thousand and teens. Congratulations to Gary and to all the Wine Star Award winners!

GaryV

  1. Steve, would you say that wine prices in general are up or down as compared to 1999?

  2. Thom Calabrese says:

    Steve, the 1st decade will not be over till the end of 2010. We use no year zero, sooo with the 1st year of this century being 2001 you are off by a year.
    I don’t get why people don’t get this???
    Otherwise enjoy the blog. Keep rolling and happy turkey day!

  3. Brett: Up.

  4. Nice to see your reflection on the decade Steve. A lot has happened. I think we will see these cycles repeat and there is hope for your “sweeter and softer” concerns. Food is fashion and like bell bottoms wines with more structure will have their day again.

    Just having a reviewer like you talk to the problem(and I am assuming you see this direction as less-than-optimal) means tht the tide will turn one day. Let’s see what 2019 brings us. Maybe you will be lamenting the days when California wines were able to be drunk early and not have to be put away for years. You never know.

  5. David, it’s hard for me to imagine that in 2019 California wines will have to be put away for years! But like you say, you never know.

  6. Why would anyone want wines that have to put away for years? It’s not as if there are only “drink immediately” and “wait 15 years.” There are a lot of wines out there that give a lot of enjoyment in the 5-10 year time frame.

    I ask, for the thousandth time, what makes an aged wine inherently better than a wine that is meant to go 5-10?

  7. The problem with aged wines is that they are old. If one looks at Steve H’s commentary on old wines he tasted recently, many of them had more curiosity value than hedonistic value.

    That said, Mr. M., had you come to dinner the other night, you would have tasted a bunch of older PNs. The Heitz ’62 was amazingly good. But, on the other hand, Mount Eden 73 and Joe Swan 81 were past their prime. Now, it is not surprising that 27 and 35 year old PNs were over the hill, but the Heitz made the entire enterprise worthwhile.

    As to your main question, there is no doubt that wine is meant to be drunk when it is enjoyable, and there is no rule, no equation, no Commandment that any wine, including CA Chardonnay must last ten years or more to be good.

    HOWEVER, there are CA Chards that need to be put away and CA Chards that do not. And if David’s point is that all CA Chards are of the same stripe and that stripe happens to be soft, dull, overoaked and out of balance, then he needs to open his mind to the full panoply of CA offerings and stop with silly and easily disproved generalizations.

  8. And keep in mind the old agage, there are no great wines, just great bottles. The older a wine is, the more extremely it’s affected by bottle variation. This is an overlooked but vital fact.

  9. Tom is wrong about the decade part. the decade began on jan 1, 2000.
    one year later is jan 1, 2001, two years is jan 1, 2002, etc.

    On january 1, 2010, ten years (or one decade) will have elapsed.

  10. Michael Donohue says:

    How did we get on to this aged wine thing? I thought we were on about the past decade (or 9 years for the purists) of the wine world. If Mondavi being bought up by Constellation or K-J’s huge growth and flabby Chard are the big stories then I suggest (and applaud) the many entrants who (I presume) are out to recreate to some degree the very best wines they’ve ever had, be they young or old, Cab or Pinot or Malmsey. The oldest wine I’ve had is a 1795 Madeira and while it was past its peak it certainly wasn’t dead or rotten , an astounding relic, to think Marie Antoinette & Co. were kicking and all else that has transpired…but probably the best Madeira I’ve ever tasted was a 1905 – but nothing, no wine, lasts like Madeira. Any discussion of aged wines has to separate the men from the boys, in this case your classed growths and their ilk, that could evolve for decades, four or five at most. (Those days are over IMHO and a recent first growth will simply not last the way they used to – thanks arguably to advances in enology.) The vast majority of old wines have some very questionable storage and transit issues and frequently disappoint. As for triple digit prices they can’t be sustained – Doug Shafer said as much when he said it now takes them a year to sell out when months used to suffice. Having said all that I’d give my eye teeth for some 00 Bordeaux, Burgs – and Riesling and Hillside Select @ 03 prices

  11. Incredible. Ten years ago I was helping a friend run for our 8th grade class president.

  12. Charlie, I think you mistyped. I never said anything about the quality Cal Chards or characterized them in any way. I don’t even drink Cal Chards. Steve was the one talking about the softer Cal style. Bizzare comment on your part or you have the wrong name. Check the post.

  13. David, you wrote the following. —-> Maybe you will be lamenting the days when California wines were able to be drunk early and not have to be put away for years. You never know. <—-

    If it does not mean what I think it means, then my apologies. In any event, my comments about the large and varied stylistic choices available to drinkers of CA Chards do stand. I am happy to admit that I get pretty peeved when all CA Chards seemingly get lumped together and then abused for being too soft, sweet, oaky, buttery, popcorny, alcoholic, etc, etc. I know better, and it disappoints me that those misleading, misinformed generalizations persist.

  14. Charlie, Just a miscommunication. No big deal. I agree that we all tend to speak in generalities in wine and not all California wines(Chards included) should be painted with a soft and sweet brush. I’m a winemaker and I like to think that my wines shouldn’t be lumped in with all of my piers in California. There is quite a diversity.

    FYI I just had a Rombauer Chard at an event last week that was really nice and complex. I would have been proud to have made that wine.

  15. David–

    Not be a smart ass, but only by way of communication, that wine is sweet. don’t know the RS, but a couple of vintages ago, we tested it at over 1%.

    However, it is also well-balanced, nicely fruity and does have some complexity. Not my choice for seafood, except for the right dish, but chicken in sauces, some simple pork preparations, etc, many first courses go perfectly well with the wine, just as a slightly sweet Riesling would work in those settings.

    On the whole, I would choose a comparably structured Riesling, but your point, with which I agree, is that wine is not made by Commandment, and even sweet Chardonnay, made well, can be satisfying. I have chosen that wine from wine lists when it was the right choice for the setting and foods.

    I also chose it for a group of winewriters have an independent dinner simply to show that we need to rise above preconceptions and generalizations. However, I hasten to add that most CA Chards at its price point are bone dry and suitably endowed with acidity.

    Care to say where you make wine?

  16. Shawn Denkler says:

    Steven Mirassou asks for the thousandth time, what makes an aged wine inherently better than a wine that is meant to go 5-10?

    Bottle Bouquet!

    Unfortunately bottle bouquet does not develope in todays wines with high alcohol and high pH. This means almost no California wines made today will develope it. So for california wines an an aged wine IS NOT inherently better.

    For the very few of us that like bottle bouquet better than tons of ripe fruit it is worth aging a wine for decades.

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