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Capitaltruism: Merging idealism with making money

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There’s a movement afoot in corporate America that doesn’t get enough attention but is gaining traction and could be a game changer. This movement is about inculcating social, environmental and health concerns into the sale of goods and services: call it Capitaltruism, where traditional capitalism meets idealistic altruism. And nowhere is it being embraced more heartily than by Millennials, who may feel that—since neither the government nor corporate America by itself is tackling important issues—it’s up to them.

Two recent developments illustrate this movement. The first is reflected by the rise of the “B Corporation.” The “B” stands for “beneficial.” A B Corporation is “a for-profit company committed to social or environmental goals in addition to its financial obligations.” That’s according to this article in the San Francisco Chronicle that describes how such corporations try “to benefit not [just their] shareholders, but also society.”

Millennials in particular are “drawn to firms that do good.” B Corps are certified by a third party, B Corporation, that claims to have registered 1,247 companies in 38 countries, across 121 industries, including wine. A Brookings Institution study found that the “desire on the part of Millennials for their daily work to reflect and be a part of their social concerns” is a chief factor in their choice of careers—and in their purchasing decisions.

The second development, reported courtesy of the Wall Street Journal, is of two California restaurateurs, Daniel Patterson (of Michelon-starred Coi in San Francisco but also of Plum Bar in Oakland) and Roy Choi, who got his start with L.A. food trucks. The pair have started up a company, Loco’l, whose aim is to replace the dismal diet of unhealthy fast food that now dominates less affluent neighborhoods with what Patterson calls a “natural, cooked-with-integrity alternative.” The first two Loco’ls will open in San Francisco’s Tenderloin and in Los Angeles’ Watts district. The foods will cost between 99 cents and $6 and will include things like a “Burg”: a beef-grain-garum [fish sauce] patty with Awesome Sauce, Jack cheese, grilled scallion and lime relish, on a Tartine Bakery bun. Sounds good, doesn’t it?

What do these two initiatives have in common? For one thing, both the Loco’l people and the B Corp people want to make money. But they want to do so in a way that addresses serious social concerns that, frankly, are not yet being addressed adequately. Both ventures are fueled by idealism and creativity, and both fill an important niche in a consumer market that’s been waiting for somebody to give them something worth spending their money on. What a fabulous idea!

Have a great weekend!


What about those reports that “weaker wines are better than stronger ones”?

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You’ve probably read about it: According to Fox News, a new study out of Spain has been widely reported to “prove” that “People think weaker wine tastes better.”

But, in fact, the study doesn’t show that at all; and much of the second-hand reporting on the study actually shows how lazy journalists can be.

For example, the Fox account of the study claims that people think wine with a lower alcohol content tastes [better] because it allows them to focus on the diverse flavor profiles of the beverage.”

That’s a pretty sweeping statement. If you’ve been deep into the alcohol-level tall weeds, as I’ve been, you might think, “Wow, that gives credence to the In Pursuit of Balance argument.” But, in fact, if you read through the entire Fox report, you won’t find a single wine variety mentioned. You will find the implication that wine with 12 percent alcohol “induce[s] a greater…exploration of sensory attributes” than wines in the 14-15 percent range, or higher.

Well, let’s think about that for a minute. Do you really want to drink a 12 percent Zinfandel? A 12 percent Petite Sirah? A 12 percent Merlot, Cabernet Sauvignon, Sauvignon Blanc or Viognier? In fact, let’s be even more generous and raise the alcohol level on those six varieties to 13 percent. What do you think they’d taste like in California?

Not very good. They wouldn’t be ripe—nowhere near ripe. They’d be all sour in acidity, with chlorophyll flavors and tart green fruit. This is why California vintners allow those varieties to get ripe enough to yield wines above 14 percent and usually above 14.5 percent. In the case of Zinfandel and Viognier, sometimes the alcohol level is 15 percent or higher.

When we’re talking about Pinot Noir (and sometimes Chardonnay), the story is, of course, different. California can indeed produce splendid Pinots below 14 percent in a good vintage, as the recent I.P.O.B. tasting showed. But to use the Spanish study to “prove” that consumers don’t like any wine over 14 percent is completely misleading.

Let’s look at the study itself, not just Fox’s reporting. Its key finding—the one seized upon by so much of the media—is, “significantly greater activation [of the brain’s flavor-processing regions] was found for low-alcohol than for high-alcohol content wines…”. It is this assertion that led to such headlines as:

Does weak wine taste BETTER?” (Daily Mail)

“Wine With Lower Alcohol is More Appealing” (Bustle)

and “Taste Perception Higher With Lower Alcohol Wines” (The Drinks Business)

But, again, the actual study did not identify specific grape varieties that were given to the subjects. (Does anyone really think that a low- alcohol Zinfandel from Amador County or an unripe Viognier from Russian River is “more appealing” than a ripe one?) All the study says is that the wines tasted were red Spanish [varieties] coming from Rioja, Navarra, and Cataluña),” of unidentified grape varieties (although we can presume they were old varieties like Garnacha, Tempranillo and Monastrell; there may have been some Cabernet and/or Merlot blended into them to make them richer). All of the 26 subject tasters were Spanish. From this, we can infer that the subjects all had palates geared towards Spanish (not California) wines. We also can infer that, in all probability, they are not familiar with our California wines that routinely clock in higher than 14.5 percent alcohol. And so, it seems to me, the study has very little application to an assessment of ripeness and alcohol levels in California wines.

Discover Magazine also reported on the Spanish study and also read into it things that are not supported by the facts. They wrote: people tend to pay more attention to the flavor when the alcohol content is low.” Well, I would wager that if you give a big, tasty California Zinfandel, Petite Sirah, Cabernet, Viognier, etc. to anyone, even Europeans, they would not and could not indict it for lacking in flavor! Some of them might not care for that particular wine—but they’d pay attention. And that’s what makes the world go ‘round: Different strokes for different folks. That doesn’t bother me at all—but sloppy reporting does. The Spanish study simply doesn’t support the “low alcohol wines are better” headlines.


Diageo moving towards “content information” on wine labels

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No one much noticed last Friday’s report in the Wall Street Journal that Diageo is going to start listing calorie counts “and other content information” on its spirits, including Johnnie Walker Scotch and Smirnoff vodka, “in what it said was a first for the industry.”

That nugget was buried on page B5 of the newspaper, on the same page as the weather. But it’s big news, with implications for the entire industry.

The article didn’t say anything about Diageo’s wine brands, which include Chalone, Sterling, Blossom Hill and Rosenblum. So I went to the company’s website and clicked on the “News & Media” link, which led to a March 19 press release from the company that strongly suggests that the disclosure will include wine. There is this phrase: Diageo believes that consumer information for alcohol is best provided per typical serve, so that consumers can understand the alcohol and nutrition content of serves of different drinks, which vary in size across beer, wine and spirits.” Moreover, at the bottom of the press release, in a “Notes to Editors,” as an “example,” the company showed a label of a Blossom Hill wine. The press release also hints that Diageo will go much further in their disclosures than simply listing the calorie content; they vowed also to reveal “nutrition information…,” although they didn’t say what specific nutrition information they will publish.

It’s unclear to me whether “nutrition information” is the same as “ingredient information,” although it wouldn’t seem so. The latter has been a contentious issue nipping at the edges of the wine industry for the last few years. Ridge Vineyards has already begun ingredient labeling, listing such things as calcium carbonate, SO2 and indigenous yeasts on the back label. Besides, as Harvey Steiman points out in Wine Spectator, ingredient labeling for wine is tricky. It’s complicated, a lot harder than ingredient labeling for, say, a can of soup. And there also are financial considerations for smaller wineries. Sometimes I think that this consumer demand to know about every micro-molecule that enters their bodies in every sort of food and drink borders on the obsessive.

Still, that’s politics. Diageo’s move is significant because, as one of the nation’s largest wine companies, they clearly believe they’re reading the handwriting on the wall, and want to get out in front of what may become a mandated trend. So be it; what will be, will be. Personally, I’m against ingredient labeling or content labeling on the actual wine bottle. That sort of thing could easily be done on a website. Everybody’s got a computer or smart device these days, so it would not be an imposition on consumers to click on a link or two. Wine labels are lovely works of art: producers go to great lengths to make them graphically appealing. To clutter them up with ingredients and nutritional data would be ugly.


Trying to comprehend the red blend trend

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I’ve been watching this burgeoning red blend trend for years. Although red blends have been around forever, I first learned that they were seriously on growers’ and producers’ radar about 5 or 6 years ago, when I spent a most delightful day with Joey Franzia, Fred’s son, of Bronco Wine Co.

We had driven down and back from Oakland to Paso Robles, and on the long haul we had a good conversation about all kinds of stuff. When I asked Joey what was new with Bronco, he mentioned two things in particular: the growing popular interest in Moscato and in red wine blends, both of which Bronco was planting furiously.

Well, when the scion of the fourth-biggest wine company in America (20 million cases annually) tells you about trends, let me tell you, your ears prick up. So from then on my brain was alerted to any news about the red blend trend. (Not so much about Moscato. I thought that trend had a short shelf life.)

The latest wine writer to opine on red blends is Lettie Teague, in the Wall Street Journal. She cites Nielsen as saying that “the domestic red-blend category…is one of the fastest-growing wine sales categories in the country.” The trend began, asserts Teague, with the 2001 release of The Prisoner, “the first American red-blend superstar.”

The Prisoner indeed is something of a pheenom, but it’s not as if it emerged parthenogentically from the mind of Zeus, or of Dave Phinney. It had historic and notable antecedents. For most of history wine was not labeled at all. Varietal labeling in America is a more or less modern occurrence, the brainchild of post-Prohibition purists, such as Frank Schoonmaker, who wished to distinguish our wine from its European brethren. (Yes, there was varietal labeling in California in the 1800s, but it was the minority.)

Even with the popularity of varietal labeling, though, there always has been a feeling among winemakers that they did not wish to have their hands tied by the government’s rules. If it took less than 75% of a named variety to produce a better wine, so be it. Hence Meritage and proprietary names. Then, too, the practice of “field blends” also came roaring back in the 1990s and 2000s, with the success of bottlings like Carlisle’s “Two Acres” blend of Mourvedre, Petite Sirah, Syrah, Carignane, Peloursin, Alicante Bouschet, Zinfandel and a white variety, Helena. Such old-vine blends can be really superlative.

The juxtaposition or intersection of winemaking style versus government winemaking rules is complicated and as old as time. Phillippe the Bold, the Duke of Burgundy, forbade “disloyal Gaamez” from growing in his realm in 1395, an early example in Europe of the intrusion of government (in this case Royal) into winegrowing affairs. The A.V.A. laws as drafted by our own Federal government in the late 1970s and early 1980s were merely a democratized version—one widely thought to be innovative and reformative then, but could just as easily be seen as nanny-state meddling now. There is no reason, and there never has been, why a varietally-labeled wine should necessarily be better than a blend.

Some producers will point out, accurately, that consumers are now used to varietal labeling; they (the producers) can’t be expected to pioneer radical marketing practices that will cost them business. This is true. But all things evolve, even in an industry as resistant to change as is wine. There is no reason to think that younger consumers today are as obsessed with varietal labeling as their parents and grandparents. If anything, there’s reason to think they’re moving in exactly the opposite direction.

Teague points this out, suggesting that many younger wine drinkers find red blends more “friendly” than varietals (and cheaper, too). The current (April 2015) issue of Wine Enthusiast has an article on “The Changing Face of Wine” (sorry, I can’t find it online to link to) that’s all about “a new generation of winemakers…the world over” who are creating wine labels that are “fun, bold [and] wildly creative”—and many of these wines are red blends that eschew identifying specific varieties and whose “coolness” appeals to younger drinkers.

I do think producers of these red blends are going to have to give consumers a little help regarding what the wines taste like. Consumers know that a Cabernet Sauvignon will be full-bodied, a Pinot Noir lighter and more elegant, a Zinfandel spicy and bold. But they have no idea what a fancifully-named blend tastes like or what kinds of foods to drink it with. This is where the back label comes in. I’m a big fan of back labels. They’re the producer’s opportunity to talk directly to consumers at the point of sale. I know there have been studies on the impact of front labels in off-premise sales. It would be interesting to study the effect of a well-produced back label. If I were looking at two bottles that were similar in every respect, except that one had nothing on the back label except the usual boring stuff, while the other gave me information about grape sourcing, wine style and food suggestions, I’d be much more likely to buy the latter.


Crowdfunding your Napa Valley Cab: is it tacky, or smart?

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Nothing illustrates the entrepreneurial challenge of a cult Napa Cab staying relevant than Yao Ming’s turning to crowdfunding for his winery’s financial needs.

When his wines hit the market, I was as excited as anyone. I gave the 2009 Family Reserve 97 points—the highest of any critic I’ve yet seen (although only by a hair). It was a big, big score for stingy old me—and the next year, I was even more generous, with 98 points for the 2010. The wines were glorious examples of modern Napa Valley Cabernet, but the prices were absurd: $625 the bottle for both vintages. I figured Yao Ming figured he had a lock on the wealthy Chinese market, at a time when it was seemingly willing to spend anything on great wine, so why not go for the gold? After all, he was one of the biggest Chinese-American superstars of the decade, maybe ever.

Now here we are five years later, when the Wall Street Journal is reporting that “As China’s luxury wine market cools,” Mr. Yao is being forced to change his business model. With Beijing’s anti-corruption campaign sapping demand for expensive wines,” the paper says, “Yao Family Wines is shifting its focus from Chinese banquet tables to US steak houses.”

Wow. That’s quite a radical change in business model. Do you think that $625 retail bottle price can survive the transition to steak houses? I don’t. Who’s going to pay $1,000 for a bottle of Napa Valley Cabernet Sauvignon to drink with the rib eye and baked potato? Perhaps the wine Yao Ming is aiming at American steakhouses is their second-label Napa Crest brand that retails for $48. It’s a solid wine: I gave the 2010 91 points, and my successor in Napa Valley reviewing, Virginie Boone, gave the 2011 90 points. But I think they’re talking about the Yao Family Cab. Whatever the case, the crowdfunding suggests that Mr. Yao is having some difficulties earning enough money to keep his business going through sales alone and is turning to this new, promising but largely unexplored area of crowdfunding to raise money from the masses.

Is there any shame about crowdfunding? I’m undecided. It may well be a wave of the future type thing. After all, we think nothing of a startup Silicon Valley firm taking venture capital from wealthy angels; in fact, it’s a source of pride that a smart, rich investor would think highly enough of a company’s prospects to put her money into it. I suppose that crowdfunding, of the sort Mr. Yao is engaging in (“as little as $US5,000 per person,” the Wall Street Journal says), is simply venture capital for the hoi polloi.

Still, it does make one wonder. What would we think if, say, Screaming Eagle, Araujo, Harlan, Bryant Family or Colgin announced they were crowdfunding? I think there would be a lot of raised eyebrows, and even, perhaps, some upset people on their mailing lists, who might feel that turning the reins over to “the crowd” was impinging on their notion of exclusivity.

Perhaps this is the way to expand an empire that’s already flourishing and can flourish even more. Yao Ming says he wants the money to (in the Wall Street Journal’s reporting) “build a visitor center in Napa Valley and a tasting room in Shanghai.” Given the current blowback from wine country residents against new tourist facilities, Mr. Yao may have some ‘splainin’ to do in Napa Valley. But I suspect that hundreds, if not thousands, of people will want to send him their money, to be connected with his brand, to get whatever perks or discounts they’re entitled to on the wines, and to just have the feeling that you don’t need to be a multi-gazillionaire to have a little bit of ownership in a Napa Valley winery.


Networking in San Francisco’s wine and food scene

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I used to go to every P.R. event I was invited to—which was a lot—when I started out as a wine writer. With Wine Spectator cred, I was on all the A lists in San Francisco. When I moved over to Wine Enthusiast as chief California critic—a big step up in power—the invitations only increased.

It was really cool, I thought, to be welcomed at all those top restaurants and clubs, to be wined and dined on wine and food I wouldn’t otherwise be able to afford, to be treated with a certain respect and courtesy. But guess what? I soon tired of the scene, which, it seemed to me, was populated mostly by networkers looking to sell their products or services. I wasn’t networking; I already had the job I wanted.

For some years now, I’ve been pretty selective about what I go to. The invites still pour in, but I seldom feel the need to go: I’m happy snuggling up with Gus at night and reading a good book, watching something on the telly, or getting some work writing done on the computer. But last night was an exception. I’d gotten invited to a client meet-and-greet by Postcard Communications, an up-and-coming S.F. agency, whose offices are located in a cute little building on uber-cute Maiden Lane, two blocks east of Union Square. The firm represents restaurants, artisanal food producers and wineries.

I’m not entirely sure why I went; something prompted me to. So I took BART into the city (four stops) and was there promptly at six. It was the usual thing: grazing through tables of delicious foods and wines. Met some nice people; traded business cards; had some superficial chats. There are two or three individuals I plan to follow up with.

I stayed for about an hour, then—feeling like the old uncle in a group whose average age seemed to be about 24—I left. On the way home on BART four young men were break dancing for contributions. It was fun to watch and I wished I’d brought something less than a couple twenty dollar bills so I could give them a few bucks. (It felt weird asking for change. Should I have?)

And I thought: I don’t really need these networking events anymore, but they’re fun to go to occasionally, and moreover, they really are the bloodstream of the younger part of our wine and food culture. Everyone I met had already had three or four “careers” in their search for one that suited them. One guy had been a teacher, a techie and had worked in publishing, before ending up in the food business. These folks, at their tender age, are still figuring out where they want to be and what they want to do insofar as work is concerned. They’re happy to be living in San Francisco or the East Bay (although prices are killing them). For a veteran like me, it was refreshing to see such burgeoning passion and talent incubating in the Bay Area, which is such a remarkable fount of creativity, from the programmers of Silicon Valley to the musicians and chefs of Oakland. I sometimes think of it as a kaleidoscope of personalities, dreams, ambitions and skills, always shifting and transforming into beautiful patterns of symmetry and color. From it will emerge the successes of tomorrow.


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