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To innovate or not? That is the question [for the bottom line]



When it comes to developing new types of wines, wineries find themselves walking a narrow line. On the one hand, they want to stay on top of emerging trends in consumer taste, if not actually lead them. On the other hand, they don’t want to get too far out ahead of consumers, and risk making wines no one wants to buy.

Here in California, where you can grow just about any variety in the world, the question is of special poignance. The California wine industry was brilliant in its period of youthful creativity because vintners took risks that promised, and succeeded in delivering, great rewards.

But California wine isn’t youthful anymore. It’s a mature, multi-billion dollar industry, and like most successful industries, its leaders have to decide when, and how much, to innovate. This involves no small amount of risk. Even Apple—widely regarding as the most innovative company in America—may have stumbled a bit with the Apple Watch. It’s not clear yet whether it has the staying power of, say, the iPod and iPhone. (And why didn’t they name it the iWatch?)

Similarly, wineries have to decide in advance if something will have the staying power to make investing in it worthwhile. But the history of wine is replete with examples of ideas that didn’t work quite as planned. For example, some years ago, Sangiovese—the Tuscan grape variety responsible for such great wines as Chianti Classico and Brunello di Montalcino—was predicted to become “the next great red wine in America.” As a result, California vintners planted it extensively. By 1996, there were 1,359 acres of Sangiovese in the state, about 1/8 the total of plantings of Pinot Noir.

Fast forward to 2013, when there were 1,868 acres of Sangiovese in California, an increase of only 1.3%–one of the smallest increases in acreage of any major variety in California over that same period. By contrast, plantings of Pinot Noir in 2013 had exploded to 41,301 acres. There is now 22 times more Pinot Noir planted in California than Sangiovese.

What happened? Despite the rosy scenarios, Americans turned their backs on Sangiovese, For whatever reasons, they didn’t like it. Many wineries found that they had to tear out the vines, or bud them over to another variety, at great expense to their bottom lines.

This shows that good forecasting is a necessary part of running a successful winery. But forecasting is not an exact science. Winery owners are, at heart, conservative. I don’t mean that in a political sense, but in a business sense. They don’t like to lose money, which is why, when they find a formula that works, they tend to stick with it. They understand, most of them, that, if they hope to remain in business for the long haul, they have to have some sense of where the market is going. They understand, too, that things never stand still; the California wine market will change over the years. The question is, How? In reality, that translates to the question: Should we venture beyond (fill in the blank: Cabernet, Chardonnay, Pinot Noir, Zinfandel, Sauvignon Blanc, Syrah) and try something out of the ordinary, that might possibly make great wine? But too often, in this conservative mindset, winery owners are opting to take the safe and tried route.

Yes, there are wineries tinkering at the edge, with Gruner Veltliner or Tannat or things like that. But really, we remain a chocolate and vanilla wine-drinking country. If I were a winery owner, would I roll the dice and gamble on something few people have ever heard of? Probably not. But I like to think that, if I succeeded in making and selling Cabernet or Pinot or Chardonnay, I’d devote a few acres to rarer varieties. After all, not that long ago Pinot Noir was a big nothing in California. But people, like Richard Sanford, Joe Rochioli, Jr. and Joe Swan, believed in it—and look where we are today.

  1. Bob Henry says:

    “(And why didn’t they name it the iWatch?)”


  2. Bob Henry says:

    From the San Francisco Chronicle “Wine” Section
    (March 25, 2004):

    “Although California-made Sangiovese hasn’t held a candle to Chianti, sales of domestic Pinot Grigio are on fire”


    By W. Blake Gray
    Special to The Chronicle

  3. Bob Henry says:

    “But I like to think that, if I succeeded in making and selling Cabernet or Pinot or Chardonnay, I’d devote a few acres to rarer varieties. After all, not that long ago Pinot Noir was a big nothing in California.”

    Even more than “not that many years ago,” Chenin Blanc plantings and sales handily eclipsed those of Chardonnay.

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