Cooking with wine

I was cooking a stew with my roommate the other night, and as the underqualified cook, my contribution was opening the wine. Once I did – my roommate asked if he could have the bottle (Meiomi Pinot Noir), and he proceeded to pour a cup of red wine into the beef stew he was making. That got me thinking – where exactly did the idea for cooking with wine come from? And how do you do it properly?

According to “What’s Cooking America” - the function of wine in cooking is to intensify, enhance, and accent the flavor and aroma of food – not to make the flavor of what you are cooking, but rather fortify it. As with any type of seasoning in cooking, balance should be observed while adding it in – a small quantity of wine should enhance the flavor of the dish.

What happens to the alcohol? In cooking, the alcohol in the wine is evaporated, and what is left is the flavor of the wine. Boiling down the wine concentrates the flavor, and intensifies either the acidity or the sweetness. To optimize the flavor, wine should be added while allowing a sufficient amount of time to cook.

Here is my favorite recipe that incorporates wine as a key ingredient – boeuf bourguignon

Sommelier as a career

Sommelier, which means ‘wine steward’, in French is a trained and knowledgeable wine professional. It is widely considered one of the hardest jobs to get, given how rigorous the education and certification process is. Forbes reports that the average candidate sits for the exam two to three times, and some take it as many as six times. It takes years to prepare for, and a very small percentage of candidates who take the test actually pass.

As a bit of history, the Court of Master Sommeliers (CMS) was established in 1977 “to encourage improved standards of beverage knowledge and service in hotels and restuarants.” The first Master Somm exam was held in the UK in 1969. Since the Court’s inception, only 229 candidates across the globe have earned the Master Sommelier diploma, which is the “ultimate professional credential any sommelier can attain worldwide.” All aspiring Master Sommeliers have to sequentially pass the intro exam, the certified exam, and the Advanced Sommelier exam before they’re even eligible to take the three-part Master Sommelier exam.

In terms of pay, according to the most recent poll by the Guild of Sommeliers Salary Survey of 2014, the average salary for a Master Sommelier is $150,000, compared to $78,000 for an Advanced Sommelier.

Wine in the Philippines

Inspired by all the great presentations that we saw a couple weeks ago, I was curious about wine from my family’s home country – the Philippines. This post is about the wine market in the Philippines and whether domestically produced wines have the potential to reach the world stage.

I had never heard of Filipino wine before, and I now know why – there’s close to none in the Philippines. Most of the wine produced in the Philippines are based on locally produced cros such as mangoes and rice. Grape-based wines are mostly imported from Australia and European countries. In 2012, there were reports that there were attempts to produce grapes, but those efforts failed due to unsuitable soil conditions and high temperatures native to the Philippines.

That said, several remote communities in the Philippines have wine making traditions that date back to the colonization of the Philippines by the Spanish in the 16^th century. Among the wines produced in the Philippines is the tuba – which is produced from coconut saps or nipa palms. There are super-local wines as well, but these are rarely commercialized and are typically drank in villages.

Wine in the Philippines is concentrated significantly in Metro Manila, where an estimated 70 percent of total wine sales take place. The majority of wine that is consumed in the Philippines is imported from the US, its leading supplier since 2009. The Philippines, in return, is the largest US wine market in Southeast Asia in terms of volumes – and growth is expected to continue. At least 20 million Filipinos now have sufficient income to purchase wine occasionally, and its citizens are becoming more affluent. Given the company’s robust economic recovery, we should expect the country to become a target for many international exporters in the near future.

Wine words

Wine tasting is fun, but if you’re like me, there are times when you at a total loss for words for how to describe a wine that you are tasting. Or, you may be with a few aspiring wine connoisseurs who can speak about wine with an entire vocabulary list that you don’t recognize. I’m writing this post to demystify the insecurities that some people have about drinking and describing wine.

A wine that smells really intense ·         Aromatic lift (white wine) – having a pleasant and distinctive smell ·         Bold aromas (red wine)  - confident, courageous smell ·         Tremendous nose – the character of a wine as determined by the olfactory sense, also called bouquet	A wine that doesn’t smell very much ·         Delicate ·         Closed ·         Subtle ·         Soft ·         Light
A wine that tastes really strong ·         Extracted ·         Persistent ·         Flamboyant ·         Rich ·         Full-bodied	A wine that doesn’t taste very strong ·         Elegant ·         Nuanced ·         Airy ·         Subdued ·         Mellow
Bitter ·         Tannic ·         Chewy ·         Muscular ·         Structured ·         Firm	A wine that tastes smooth ·          plush ·         round ·         velvety ·         supple ·         opulent

Wine pairings – it’s all about balance

I’m writing this blog post in response to a comment made by Alder Yarrow in our penultimate class last week. He said that wine pairings are a myth – and that certain wines don’t pair with food better than others. I disagree – here’s why.

First off, the history and wine and food pairings is inherently cultural. Wine, for a very long time, has been a staple at the dinner table across many cultures. Thus, the habit of pairing international wines with their corresponding cuisine became the basis for many wine and food pairings today. However, eventually the act of pairing became an art form – one practiced by some of the most high-end restaurants today. The question is – do some wines actually enhance experience of eating certain foods.

Most food and wine experts believe so – at least at a basic level. The most basic element of food and wine pairing is the balance between the “weight” of the food and the “body” of the wine. Robust wines, such as reds (e.g., Cabernet Sauvignon) would overpower a light, delicate dish, such as a quiche or a fish. On the other hand, light-bodied wines, such as Pinot Grigio, would be overwhelmed by a boeuf bourgignon. The key takeaway here is – you want to be able to enjoy the taste of both your wine and your food without either one stealing the spotlight.

It isn’t just food and wine experts – science agrees too. Findings published in the October 9^th of Current Biology suggests that “mouthfeel, the way food feels in our mouths, is responsible for the phenomenon. Or example, Astringent wines often feel rough and dry in the mouth, whereas fats are slippery. Eating them together helps balance the two out. In the study’s summary, authors refer to this “balancing” mechanism as “palate cleansing.” As a result, they found that participants in the study provided lower ratings of fattiness and stringency for the food and wine that they were tasting relative to rinsing with water.

Millenial Wine

"Why aren't millennials drinking wine?" seems to be a common lament of wine industry representatives. This comment is frequently colored by commentary on the craft beer craze, whiskey, cannabis and even the desire for low calorie and gluten-free options.

But I think that the real problem lies somewhere in the stickiness of the fraternity house floor on a Sunday morning, the ease of ingestion of a gummy on a Sunday evening and the machismo associated with bourbon on Thursday night cocktail hour. Wine is simply a less convenient option in every respect.

Consider the college party - mass consumption of alcohol is the key theme. High quantity, questionable quality. The end game is a blissful state of blacking out, or close to blackout. Wine offers potential stains, red teeth and an even worse hang over were the state of blackout achieved.

Next, think to the Sunday after the weekend spent doing the aforementioned activity, the goal is probably relaxation and easy sleep. While wine seems to fit nicely here, the default is cannabis for relaxation and sadly wine is an also-ran.

Finally, consider the dinner table or company event where taste in alcohol is considered a test of character and resolve. Asking for a certain vintage shows knowledge and grace; however, there is a much greater chance that the restaurant doesn't carry the same catalog of wine that your rich uncle introduced you to over the break and thus you are risking it by throwing out the name of the vineyard, grape or year and better off asking for a hard to find whiskey, which you can temper with a "well I'll just do Woodford if you don't have that...", which is guaranteed to still evoke respect and understanding.

In short, the millennials don't do five-course meals. The bottle of wine is mainly consumed during a date or in the home of a parent. Since millennials don't know much about wine, buying an expensive bottle is less likely to impress and thus there's little reason to splurge when that same money could be used to buy differing fancy cocktails that you can each share and use as a means of learning about each other. In short, wine needs to find a new arena that works with millennials, in which it dominates the atmosphere.

A straw for wine

This is how the wine world ends - a glittery pink straw that fits into a wine bottle.
This is one of the latest inventions that the wine industry comes up to attract millennials
Each straw is 15 in long, and fits into a standard wine bottle, and it's glittery pink..
A 4-pack of these cost $15, which is very affordable for millennials
Just sitting here waiting for Kylie Jenner to instagram this to make it the next big trend in the millennial wine drinking habits...



Original link:
https://www.bustle.com/p/these-glitter-wine-straws-that-fit-into-a-full-wine-bottle-are-the-epitome-of-extra-16956233

Time to Roll-Up the Fine Alcohol Barrel Industry?

             I was reading about Bourbon recently and I was struck by the fact that, according to an Act of Congress (why is government always meddling in the Alcohol industry…), Bourbon must be aged in a brand new, charred oak barrel in order to be called Bourbon.  I knew there were other rules around Bourbon (needs to be made from a mash that is >= 51% corn, needs to be made in the USA), but I was pretty surprised that it needed to made in a brand new barrel.  Good work to the barrel industry lobbyist got that written in law!

              Anyway, this discovery about Bourbon got me thinking about the fine alcohol barrel industry and whether or not this little thought about, derivative industry might be a good place to invest.  On the surface, the industry seemed to have some solid characteristics à good growth driven by overarching macro trends toward more aged spirits, fine wine and craft beer; good positioning as a critical component of a set of high end products where there is literally law demanding certain specifications and origins; defensibility given long term contracts, brand name, and technical expertise.  Seemed like it could be an interesting place to run a business and so I decided to dig into it a bit.  After finding some publicly traded barrel makers, it seemed my intuitions were not exactly played out in the numbers.  Growth was relatively slow (sub 2%) and margins were relatively thin.  That said, I was struck by just how fragmented the space seemed to be with many of largest barrel players still family run and operating only a handful of mills.  This discovery got me wondering if there might be a role-up play here – buy many smaller players, build scale and negotiating ability, drive efficiency and margins, sell for a higher multiple at the end of the day?  I’ve heard crazier ideas.

              Also as a quick FYI, Bourbon barrels are not usually simply trashed after they make their first batch of Bourbon, but rather are shipped to other parts of the world with less strict regulations about Whiskey making, like Scotland.  I was told once that one of the famous Scotch distilleries (can’t remember which) makes their whiskey using only Maker’s Mark barrels saying they can make better stuff in used barrels than Maker’s can create in brand new ones! 

Stanford Wine Alumni

Came across this interesting site that supports wineries by GSB alumni which has been around for 38 years!

I asked my GSB alumni about this website vs. his estate winery... 'look at the price tag'... I guess in most parts of the world, $15 bottle wine is not really considered luxury..

Also, I wonder what are channels that can help create affiliation? Is it review, social status (word of mouth from wealthy individuals for instance), or just simply personal taste. As we start getting to know more about different kinds of wine, how do we develop what are nice wine, or simply put, how do I know what I like to drink?

https://partners.vinoshipper.com/stanford

Domestic wine regions that are not Napa, Sonoma

This WSJ article talks about interesting domestic wine regions that are NOT napa, sonoma, willamette valley.

@Sri, @Ryan, your midterm topic - Michigan - might very well become the next emerging wine region!

From this article, three new domestic regions are on the rise:

 --- Snake River Valley, Idaho Syrah dominates the dark, velvety 2016 Telaya Turas, which Kacey Montgomery serves at his Boise restaurant Juniper. “Idaho has similar soil and similar temperatures [to other Pacific Northwest areas], but there is an advantage to being a new, young wine-maker in a growing region,” he says, “a chance to be a little more daring.”

--- Old Mission Peninsula, Michigan The citrusy Black Star Farms 2016 Arcturos Dry Riesling is made with grapes grown near Lake Michigan’s eastern shore, which has long growing seasons with cool springs and warm falls. “Michigan makes compelling wines with soul,” says Keith Whitten, general manager at Chicago’s Daisies, which champions Great Lakes Basin wines.

--- Los Angeles County, California The 2016 Byron Blatty Agenda is a Syrah-Tannat blend offering red fruit and cocoa. L.A. restaurateur Matthew Kaner, who launched a Blatty tasting room inside his Atwater Village spot Good Measure, sees a big future in L.A. County wines. “Five to 10 years from now there will be many more vineyards on line, which will open up the scope,” he says.

Source:
https://www.wsj.com/articles/the-surprising-resurgence-of-american-wine-11552567264

Wine & Celebrity

Sarah Jessica Parker is launching her own line of wines. This begs the question of what constitutes good wines - is there a celebrity effect? If so, what does a celebrity in wine mean? Is it Robert Parker-esq critiques, Michellin restaurant chefs, pop culture celebrities, or instagram stars?

"The actress will be involved in all aspects of creating the drinks, from naming to designing the bottle label to the winemaking itself."

Jessica Parker - winemaking? What really defines good wine? Is it personal taste? Or techniques, region, marketing?

I believe good wine is like Hermes - there is some foundation in quality, but 90% of it is about story / branding / marketing. It is not like everyday food. It should be considered as part of an identity.

Source:
https://people.com/food/sarah-jessica-parker-new-line-of-wines/

WineinStyle recommendations

I recommend Eberhart and the team to sell the Company for the following reasons:

- Cash strapped: the company despite careful cash management, has seen cash flow issues, particularly due to aggressive geographic expansion in other regions, and headcount growth. With the fixed costs draining cash flow, the company has trouble financing large orders - which prohibits the Company from capturing continued growth. At this point, it sounds like the business is in a downward spiral if there is no new capital injection - no cash = no working capital = declined sales = firing headcounts = downward spiral
- The team has grown the Company from 0 to an impressive scale at ~500m yen in annual sales. Selling for a compelling valuation while the growth rates and market trends are favorable is a great return for the team with minimal risks. Going forward, the market may turn (economic recession, regulatory changes etc) and the investing market may turn (depressed valuation etc). So this might be the right time to capture the rosy market
- Eberhart should however leverage his industry contacts and aim to conduct more diligence on the new investors - particularly paying attention to terms. An upfront payment should be better than contingent payments, especially if there is little information on the potential investors.

Nebbiolo in Australia!

             The New York Times recently featured an article about a winemaker in the Yarra Valley of Australia named Luke Lambert and his recent journey to abandon the many wonderful wines he makes today (mostly Chardonnays and Syrahs) in the pursuit of making the greatest Nebbiolo outside of Italy (the Nebbiolo varietal is most famously grown in northern Italy where it is bottled as Barolo or Barbaresco depending on exactly where it is from).  The article had me thinking about a couple things relating to our class.

              First, we talk a lot in business school of international copycat businesses (Didi = Uber in China) and it seems that the exact same concept can and, over the history of new world wine, has been applied to successful winemaking ventures.  We heard it throughout our emerging regions presentations and we see it in some of the most popular new world wine regions today (Napa primarily just the Bordeaux varietals and winemaking style brought to California), but it seems like there is still a lot of opportunity to successfully bring old world varietals and winemaking techniques to new parts of the world.  Sure, there are lots of unique regions in the world, but there must be places other than the Douro River Valley that can make a great Port or other than Italy that can make a great Nebbiolo or Sangiovese.  Successfully importing these varietals and techniques could likely invigorate and give direction to many emerging regions. 

              Second, the post makes me think about diversification vs. single-minded pursuit to excellence in one product category.  I think most of us would think it makes sense to grow many varietals and make many types of wine, but is doing so trading-off on the ultimate quality of a producer’s best wine?  It seems that most international winemaker renown usually comes from single varietals or specific types of blends.  I wonder if more producers should be focusing specifically instead of diversifying broadly. 

https://www.nytimes.com/2019/03/07/dining/drinks/nebbiolo-australia-luke-lambert-sparkletown.html?action=click&module=Features&pgtype=Homepage

HBR Piece on Wine Industry

The conventional wisdom for designing and developing B2C products is based around customer empathy exercises. However, the Harvard Business Review recently published an article on how the wine industry is a good case study for actively educating customers, as opposed to reacting to their feedback. These learnings can be particularly valuable in industries in which customers don't really know what they want:

Step 1: Pursue a vision like you would an artistic endeavor, as opposed to chasing financial results (which should be an output, as opposed to an input)

Step 2: Build relationships with influential voices in the industry, and mobilize them to push the brand / product

Step 3: Create self-reinforcing cycle of status advantage as customers (who inevitably value influential voices) purchase the wine at a premium and actively promote their choice to friends & colleagues

In summary: "Producers of wines deemed extraordinary define categories and set benchmarks. Consumers become fans and pay premium prices, despite the availability of literally thousands of excellent alternatives. This ensures the financial success of those firms, even as they reject consumer input and feign the pursuit of profit."

I think many B2C businesses can learn from this model, as customers are increasingly pressed for time to make actively educated decisions. 

Full article, in case anyone is interested: https://hbr.org/2019/03/what-the-u-s-wine-industry-understands-about-connecting-with-customers?utm_source=CPG+%26+Retail+Insights&utm_campaign=ef8e7252ef-CPGNL_03_13_19&utm_medium=email&utm_term=0_5a34af6e3b-ef8e7252ef-92249973

WineInStyle Going Out With a Bang

I think that Eberhart should sell WineInStyle. I arrive at this conclusion based on several factors and it comes with a couple conditions. Each are explained below.

Factors that lead to "sell" decision

1. Family matters. Eberhart has spent a ton of time sacrificing his family for his business and I get the sense that he would like to cash in on all the time investments he's made. It sounds like his family would like to have him home more too!

2. Eberhart has built an impressive business that has proven it can win in the growing Japanese market. He's grown the company to nearly 500 million Yen of revenue in 8 years and has reached a point where he needs additional capital to grow to the next level. The business fundamentals are there, he needs to figure out how to get the inflow of capital to grow.  If he can't do that without selling a majority stake, then not doing so will likely slow growth and threaten to reduce the value of the company.


Conditions of "sell"

1. Eberhart needs to have confidence that the buyer is legitimate.  He needs to do so to ensure that he isn't leaving his CEO, Khoo, in a tough spot with potentially criminal owners. Additionally, he built the company from scratch and his personal reputation will be associated with the business, even after he sells it.  There is some risk in asking the investors to provide more information about their source of capital, but I believe it is essential.

2. Khoo needs to be on board, not only with the decision to sell, but also with the buyer. He will likely still be at the helm and I believe that it is critical for Eberhart to do right by Khoo by ensuring he is excited about the sale and the vision ahead of the company.

3. Eberhart needs to be certain that the company will not be able to survive if he pursues alternative liquidation methods for him (minority owners, leverage buy out for Khoo or others, etc.). Some of these methods may allow for Khoo and Eberhart to retain control of the company while affording Eberhart more time with his family. It may also further incentivize Khoo to build the business over the long term. 

Tasting Menu Wine Pairings

Many years ago, a friend told me about a tasting menu - wine pairing experience at the French Laundry. Unfortunately, she had one too many glasses and was not able to enjoy the last few courses. Another friend told me about a similar experience at Benu, where the wine also ended up diminishing the food experience. 

Online, the sentiment around ordering a wine pairing with high-end tasting meals appears to be mixed. Some say “you made this far, go for the wine pairing!” And yet, others say “with high prices, frequently uninspired choices, tiny pours, and lectures before every course, wine pairings are more often vinous straitjackets than perfect matches.”  

As an alternative to official food-wine pairings, some people suggest ordering a few bottles that are versatile, or talking with the sommelier to create a cheaper “wine pairing” option. With the latter option, I was again surprised to find some handy alternatives - talking about the wine budget with the sommelier, splitting the pairing with someone else, or simply stopping the pairings halfway through the meal. These are definitely some tricks that I will use next time.

At the same time, from a restaurant perspective, these wine pairings make a lot of financial sense. I had always naively thought that restaurants put in as much effort into the food-wine pairings as they did for each tiny, tasting course dish. I was surprised to discover that many sommeliers have freedom to choose wines for the pairings, which means that many frequently pick “inexpensive, but obscure wines so that customers won’t know the true cost.” Thank goodness for increasingly available wine bottle price estimates online! 

Sources:

https://www.winespectator.com/webfeature/show/id/Napa-Guide-French-Laundryhttps://sf.eater.com/2015/2/12/8021839/benu-raises-prices-eliminates-need-to-tip

https://www.tripadvisor.com/ShowUserReviews-g60713-d1898383-r257110631-Benu-San_Francisco_California.html

https://www.wsj.com/articles/why-you-should-skip-the-wine-pairing-menu-1457979686

https://www.eater.com/2014/10/17/6988471/negotiating-wine-pairing-prices

Wine Clubs

Many of our speakers this quarter have talked about how wine clubs are often the winery's best source of revenue. These comments led me to become curious about which wine clubs are most popular among consumers today, and whether there are new forms of wine subscriptions that have become more popular over recent years. 

Budget-friendly wine clubs: One reviewer defines budget friendly wine clubs as $20 a month wine subscriptions, where customers don’t necessarily have the ability to pick which wines they are getting. One “budget-friendly wine club” frequently mentioned is  K&L Wine Merchant Wine Club, which sends one white and one red wine monthly for $20. But as with K&L and other budget-friendly wine clubs, many of the wines include white label brands.

Curated wine clubs: I noticed that a lot of these “curated” wine clubs were centered around master sommeliers. One was “SommSelect” which includes six bottles of wine, curated by a master sommelier (Ian Cauble) for $199, and another very similar one was “The Grand Tour” which sends four bottles for $95, curated by another master sommelier.  A lot of these wine clubs seemed to have a strong educational component,  with educational information about the wine region, varietal, etc. This story-telling component seemed to be consistent to our class discussions about millennials wanting experiences more than physical products. 

Pairing wine clubs: Another interesting wine club experience were ones that included pairings. Wine Down Box, for instance, contains both wine, cheese, and charcuterie pairings for a monthly subscription free. Again, like the curated wine clubs, this type of pairing subscription seemed consistent with building out a more holistic wine-drinking experience.  

I probably won’t subscribe to any wine clubs soon, but I have to admit that I am enticed by these pairing box experiences. 

Sources:

https://winefolly.com/tutorial/wine-folly-guide-wine-clubs/

https://californiawineryadvisor.com/best-wine-clubs-wine-subscription-boxes/

Cloudy Bay

When I was living in Korea, one of the most popular wines was Cloudy Bay Sauvignon Blanc. I was intrigued by the poetic name and label, and an off-hand comment from a friend that Cloud Bay Sauvignon Blanc pairs well with oysters. 

I have yet to try the wine, but wanted to get a better understanding of its growing popularity, taste profile, and other potential food pairings. 

Based on information from various wine reviewers and critics, Sauvignon Blanc has become the gateway grape for a lot of wine drinkers because of its easy going and versatile nature. I found this fact to be surprising, especially given the number of media references to “having a nice glass of red wine.” And within the Sauvignon Blanc market, New Zealand Sauvignon Blancs have continued to outperform Californian and Loire counterparts, which is where Cloudy Bay is from. 

Cloudy Bay specifically has a history that dates back to the 1980s. It seems to have remained popular for two reasons (1) a reasonable price = typically around $20 and (2) powerful, fresh flavor profile = “up-front gooseberry, green pepper, and elderflower character typical of the region.” When looking at potential food pairings for Cloudy Bay, many of the suggested food options are strong-flavored seafood. 

After seeing potential pairings of “seafood dishes” or “other powerfully flavored dishesl” I started to understand why Cloudy Bay was so popular in Korea. First, wine is expensive, and so prices are typically at least 2x wine prices in the U.S. That means that Cloudy Bay Sauvignon Blanc would have been a “reasonable” price for most Korean consumers - at around $40.  In addition, Korean food contains a lot of seafood and spices, and so, in theory, Cloudy Bay Sauvignon Blanc would have paired well. 

Sources:

http://www.wineanorak.com/cloudy.htm

https://www.wine-searcher.com/m/2017/05/whos-winning-sauvignons-popularity-contest

https://www.nytimes.com/2017/07/27/dining/wine-school-new-zealand-sauvignon-blanc.html

https://www.theguardian.com/theobserver/2004/nov/21/features.magazine87

https://www.matchingfoodandwine.com/news/pairings/the-best-food-matches-with-new-zealand-sauvignon-blanc/

WineInStyle Thoughts

Eberhart and team need cash badly. They are operating in a cash poor environment without being able to successfully fill large financial orders, grow headcount, or support a higher level of inventory. But in my opinion, we simply don't know enough information about these investors or the deal to make a strong recommendation either way for whether he should sell his company.

The only thing we know about these investors based on the case is that they are not in the public records. The executive team is concerned that the investors aren't really who they say they are and that they may not have the money they claim to have. This is a red flag if I've ever heard one. Investors are only approaching them during a time when they know the company is having problems, which is a concern. Also, the case states that there has been some competitive tampering, when a competitor paid (potentially) sokaiya to pull pranks on San Sonoma. Given the team's experience entering Japan, I'd say absolutely do not sell to these people and perform TONS of due diligence first. That's the only way to set up Khoo for success and ensure that when Eberhart does return home to spend more time with his family, he can rest assured that his company is in good hands.

Separately, having just spent a month in Japan, visiting 10+ cities (and many many bars and retail establishments), I very rarely found any California wine at any establishment except the most high end. In fact, the only wine I found consistently across the country was Chilean cabs!

Innovation vs. Grape Moths

Chile has historically been affected by the grape moth: a 6 mm long butterfly that attacks grapes, raspberries and other fruits, impacting negatively exports and wine production.

Chile has been able to develop microscopic biopolymers, equipped with feromones that are capable of disorienting and erradicating the grape moth ("lobesia botrana").

This technology, which is 100% environement friendly, is a great alternative to reduce the use of pesticides allowing for a more eco-friendly solution to moths and not affecting the soil where the grapes are being grown. The implementation of nanotechnology is pretty new to Chile's agriculture, and investigators are already thinking about different uses such as preventing drought or fertilizing the pieces of land.

source: https://gestion.pe/tecnologia/chile-combate-polilla-uva-nanotecnologia-258958

Rewine

Rewine is a project inspired by the amount of glass bottles that are not recycled in Catalunya: they represent around 70,000 tons of glass a year. The UE is financing the rewine project, an incentive to use go back to old bottling methods and reutilize bottles that have already been used. These bottles will have a Rewine lable, indicating that that bottle is not being used for the first time.

The pilot has been a huge success: since October 2018, 50,000 bottles already have the rewine label. Adherence from different vineyards has also been a huge success: 4 catalan wineries and 50 restaurants in the region are already part of the program.

Let's hope this effort serves as an example for other regions, to make people aware of the importance of reutilization and contribute to the UE's fight against climate change.

Source: https://elpais.com/ccaa/2019/03/13/catalunya/1552502610_263400.html

Pairing wine with.....music??

Pairing wine and music is becoming a habit for people passionate about these two elements. It has been proven that listening to music can influence our behaviour and our perception.

According to a report written by the Heriot Watt University of Edinburgh, listening to different types of music changes our perception of the wine that we are tasting at that moment.

Click on the following link to find out more about pairing suggestions...

https://eltorotv.com/opinion/blogs/maridaje-sonoro-la-cancion-perfecta-para-cada-vino-20190313

Wine for kids?

Who hasn't been a kid playing and pretending to be an adult? However when I did it, I used my imagination and creativity... Now kids can ask for these kind of drinks...

This kind of product are in fact commercialized by well known wineries and/or beer producers. For instance, tthe Italian winery Tenimenty Castelrotto launched the Hello Kitty line of wine products and Beck's was behind the beer...

The marketing strategies were very criticized as they were said to promote alcohol consumption among kids. However, the producers claimed that Hello Kitty was not only for kids. What do you think?

A different case is the non-alcoholic product commercialized for kids as if it was wine or champagne. Even Disney launched his own and apparently, the critics the product received were not enough to stop huge sales.

Another example is Pinky, a "champagne" for kids to be able to "cheer with their parents", or "Champín" that looks exactly like a champagne.

                                              



Even without alcohol this image is still not a pleasant one to look at...

                                                      

The gadget for wine

In our last class, I heard about this amazing gadget for the first time. I was curious to know more about it as the problem it is trying to solve was a problem I have had during the past years.

As a wine lover, I enjoy having a glass a day or being able to have a glass when my friends have a beer (I can't drink beer). However, having to open a whole bottle for just a glass is a pity...

This gadget will solve my problem!

It looks like a really easy to use mechanism in which you can have a glass of wine and keep your bottle of wine as if you had never opened it before! With a needle, you have access to the wine without damaging the cork, you pressurize the bottle and release it to pour out the amount of wine you want. AMAZING!

However... too good to be true! The price is still quite expensive and I wonder if it's better to open many bottles for just a glass.....

The best wine from Spain

According to "Wine Spectator", the best Spanish Wine is also the top 4 wine in the world. We are talking about Rioja 890 Gran Reserva Selección Especial 2005. What makes this wine the best one in Spain? 

The wine has 95 points (Parker) and a retail price of 155€. 

According to experts, the wine has an excellent and aristocratic finesse. It is a clean and medium bodied wine. 
The color is transparent ruby with a slight hint of orange. 
Even if the wine is old, it is said to be very fresh. 
Aromas: cherry, strawberry, tobacco, leather, balsamic, cedar... 

The elaboration of the wine is very meticulous. The wine comes from La Rioja, which is the main wine region in Spain (DO). The harvest consisted on a very thorough selection process is followed. Only the best bunches were transported in refrigerated boxes to the cellar. The wine was aged for 6 years with 10 traditional racking. During these racking the best wines are selected and the final coupage is defined.

The key to sell wine online worldwide

Why clothes, groceries, technology and not wine? 

Last year I started buying wine online in Spain, feeling extremely weird! However I found out that it was even easier than going to the overwhelming wall in the supermarket. 

In fact, wine e-commerce is growing rapidly. The interesting thing is that in Spain, there has not been a new entrant in the market to occupy this space. Instead, the traditional wine distributors have done so. Why? 

I asked a friend of mine, whose family business used to sell wine through a retail channel and they are now selling 20% online. The key of their success, she says, is due to different factors but especially to a very customized and personalized customer service. Indeed they customize the newsletters they send the customer with recommendations according to their previous orders and to the survey they send the customer after every order to understand which wine they would prefer next. 

A fantastic way to help the customer choose and try new wines without being overwhelmed! 

Naked Wine - reconnect with the World

Technology is changing the world, what about wine? The $300 billion industry has only seen succeed a handful of start-ups.

Indeed, most of these successful start-ups are trying to connect the consumer with the overwhelming world of wine. Take Vivino, for instance, allowing the user to scan a bottle of wine and immediately have access to ratings, reviews and price information. Wine consumers are eager to have more start-ups like Vivino (300,000 scans a day!)

What do you feel when you go to a wall of wines in a supermarket? I feel overwhelmed and lost... Vivino helps, but picking a wine is still overwhelming. Naked Wines is the online wine club that wants to help me solve my problem and pick the wine for me. We, the customers, are the angels and by paying $20 a month I get an exclusive wine with a story behind, I drink knowing what I'm drinking and I learn some more about this giant world of wine. Additionally, the club gives me the possibility to exchange my opinion with a community around the world, with a same passion.

Apparently, the club has not only convinced me, it made >$100 million last year in revenues!

Not ready to take off the wine tasting training wheels

A couple of weeks ago, some MBA1s hosted a Trader Joe’s wine tasting dinner; it included various wines from the store under $10 and some of our favorite foods (much like the last day of this class). The tasting was blind - our hosts wrapped the labels in paper towels to obscure them from the rest of us, gave us tastings, had us rate them, and had us write down tasting notes.

I definitely found myself adjusting scores as we went along, but I also found it very difficult to produce coherent tasting notes. It really hammered home what Alder Yarrow talked about during his visit - it’s really difficult to translate what we’re tasting into words. Most weeks in class, I can’t get beyond “sweet,” “not as sweet”, “tart”, “grapes”, “fruity”, “tangy”, and “dry” when trying to think of what the wine I’m drinking tastes like, even though I can taste far more overall subtlety than that, and I’m not under the impression that most of the wine we’ve had tastes the same.

It makes me wish the product my group is presenting for our final really existed!

When someone else profits from your name

Already delighted to discover that Trader Joe's was founded by a GSB alum named Joe Coulombe, '54, it was fun to find out that the namesake of two buck Chuck, Charles Shaw, is also one ('71). But as it turns out, he sold the rights to his winery, which bares his name, at at time of personal financial turmoils for $27,000. Trader Joe's got the brand for a steal, and Shaw sees none of the profits.

Some of his issues stemmed from how leveraged the Charles Shaw winery was - they needed strong growth to keep cash flow positive, but this was at a time when the interest rates he was facing were about 20%, and his marriage was failing. His wife, who he described as a person who "didn’t drink wine and didn’t even like to talk about wine" ended up with the winery, and lost the distribution deal in place, which included selling throughout the US and in 20 countries. Bankruptcy soon followed.

Shaw's regrets include the poor relationship he had with his business partner/wife (no kidding) and the fact that he was too rigid in the wine space he wanted to play in. He wanted to be the "light red" guy, so he focused gamay varietal from the Beaujolais region of France, but feels like he should have instead produced "a chardonnay, a merlot, a sauvignon blanc, for example," then gone to the market and observed the demand. Even in the wine world, iteration and market observation is key.

Source: https://www.gsb.stanford.edu/experience/news-history/charles-shaw-mba-71-risk-rigidity

A question of land ownership in South Africa

Wineries are a question of land ownership. In places like Napa Valley and Sonoma, the ownership is clear (enough). At some point in the past it came under the ownership of someone with a deed, who sold it someone else, who owns it today. We (mostly) no longer talk about how land ended up in the hands of the Americans who eventually flipped it in the first place.

Not so in South Africa. The very recent history of apartheid renders the question of land ownership - Is it valid? Is it fair? Should it change? - very acute. The Stellenbosch wine region is actively dealing with such issues.

One of the things that complicates the question of ownership is the fact that a non-trivial amount of this land is actually public - right before the end of apartheid, the government gave a number of white farmers 50 year leases for public lands in exchange for their investment in water infrastructure.

Adding to the turmoil, the area in question is where most of the leaders of apartheid were originally from, making this symbolically loaded. Stellenbosch is often called “the cradle of apartheid.” Yikes.

Right next to the wineries there is a poor, black, overcrowded neighborhood called Kayamandi, separated by barbed wire and electrified fences. Some of the people who live there have started to squat on a farm owned by Stefan Smit, building thousands of metal shacks, resisting arrest, and refusing to leave.

What are the obligations of tourists who want to take advantage of the South African wine world? Should they make a point to learn this history? Should it change how they explore the region? I’m a big believer in understanding the context of the place you’re visiting, but it’s not totally clear that the answer here to not go. It’s important to see how this case shakes out and what happens as these leases start to end in the 2040s. How will South Africa continue to grabble with the inequality that besieged it for so long, and how does that extend to land rights?

Source: https://www.nytimes.com/2019/03/09/world/africa/stellenbosch-south-africa.html

What to do about the cash crunch - WineInStyle

What an amazing feat by Robert Eberhart. He did a remarkable job of transferring skills from his experience in electronics and transforming the learnings into a successful California wine import business in Japan. What's more, he did it by focusing on execution while his competitors focused on wine as a prestige product.

I also particularly loved the portion of the case where he became a "part-time retail anthropologist", the on-premise customer observation definitely struck a chord with me as a former product manager. And as far as the insight in the case about how most people select the second cheapest wine -- let me tell you, many of my restaurant clients back in New York confided that they price the cheapest wine they buy as the second cheapest wine on the menu, so you're often better off getting the cheapest (or third cheapest) wine on the menu.

But let's get back to the question at hand. To sell or not to sell? The question is really about working capital. The 3x import volume growth that Khoo was able to achieve as CEO in such a short time was remarkable, but it certainly came at a cost. Cash is definitely king, especially when you increase your headcount so rapidly while closing larger deals than ever before. But does that necessarily mean that selling the company to mysterious and untraceable investors is the way to go? An exit would certainly help Eberhart get to spend more time at home with his family. But there are alternative avenues to achieving this. Raising debt to pay for the additional staff plus someone to oversee the cash flows so Eberhart could take on a more removed advisory role seems like a better choice at this time. This way, he can continue to hold a steak in the company through this high growth phase and wait for a more attractive and transparent offering at a higher valuation.

Perspective on WineInStyle

In order to significantly expand the business, the WineInStyle team needs a cash infusion. Moreover, it will be difficult for the company to expand its geographic reach and its national sales volumes without continued investments in new headcount. Given the limited avenues for Eberhart to streamline operating costs, he should accept the investment, but only if he is able to maintain his controlling interest and after he's conducted due diligence into who the potential buyers are. If he is not able to establish their identify as a buyer, he should seek a different local partner with ties to the local banking/investment community who can help secure a line of credit or an investment with more favorable terms.