Wente Vineyards and... Jane Austen?

I was scrolling through old Facebook photos (as one does) and stumbled across a collection from my last trip to Wente Vineyards. As you can see below, there's something a little odd about my group's choice of attire.

As we've seen in several cases, investing in tasting rooms or hospitality can be a good move for wineries looking to improve profitability by driving direct-to-consumer sales. Wente has a gorgeous tasting room and outdoor picnic area, making it a perfect event venue. So it's not surprising that when the Bay Area Costumers' Guild wanted to host a Regency-era picnic and wine tasting, Wente made the shortlist of potential locations (despite not being quite old enough to fit into the Regency period -- but then again, neither is the state of California!). We had a wonderful time chatting, tasting wine, and playing Jane Austen-themed games, and an awful lot of visitors to the winery ended up taking photographs with us. I can also confirm that we were good for Wente's business, as we purchased plenty of wine in addition to our tastings!

Organic, Biodynamic, Sustainable, and Natural

Consumer preferences are shifting towards more natural and sustainable products across the board, especially in food and beverage. I've heard the terms organic, biodynamic, sustainable, and natural thrown around in reference to wine, but didn't quite know the details. After a bit of research, here's an overview:

Organic

• This one is simple. The stipulated conditions for organic wines are the same as those for organic foods. Namely, no chemical or artificial fertilizers or pesticides are used.

Biodynamic

• Like organic vineyards, biodynamic vineyards eschew pesticides and fertilizers. In addition, they take it a step further and engage in a set of farming practices that focus on the vineyard as a full ecosystem. The goal is for the entire farm or vineyard to be self-sustaining and farmed following the ecosystem's natural cycles. Biological diversity is a key component and at least 10% of farm acreage must be set aside as a preserve. Many of these farms keep animals whose manure is used to fertilize the soil. Some biodynamic farmers incorporate lunar cycles and astrological influence into their practices.

Sustainable

• A bit vague and all-encompassing. Both organic and biodynamic farmers are likely to consider themselves sustainable. In addition to the above, sustainable wineries may focus on energy efficiency or water conservation.

Natural

• While the first three groups look at how the grapes were farmed, natural wine refers to how the grapes are processed. Natural wines are low-intervention wines. They tend to be hand picked, juiced without machines, and hand-pressed (rather than mechanically-pressed). These wines lack added acid, sugar, enzymes, or sulfites.

Wine Cellars - The Billionaires and the Rest of Us

Before coming to the GSB I work in a small cybersecurity company in Seattle, WA. One of the founders of the company had previously work on for one of Seattle's billionaires (I won't mention who, but there are only a few so you can take a guess). During our time working together he told me a story about his former employer that I found unbelievable. The story is retold below:

The employer hired a custom wine cellar maker to renovate a massive wine cellar at this person's home. The cellar was gorgeous and my friend remarks to a member of the employer's staff about what an a great job the craftsman had done. The other employee agreed that it was very nice and would serve the upcoming party well.... and then it would be torn down and redone again!

I've never personally been custom wine cellar shopping, but this story did get me think about the amount of money people pay to store their wine. I recently stumble across this article that claims to list 10 of the worlds most amazing wine cellars. Fair warning, they are incredible, and way over the top.

For those of us who aren't installing 2,000+ bottle cellars, I'd like to hear how you all store your special bottles? Do you simply keep them on a shelf or have you invested in one of the small wine coolers/fridges? Something else?

Wine tourism: why now?

Almost all of the midterm presentations talked about wine tourism as one of the trends that would benefit the region that they presented, starting from our midterm on Austria to Mexico, South Africa and New Zealand. Literally regions all over the world. I was curious to know more about wine tourism and found this interesting article that talks more about it and why it is growing so fast:

https://www.telegraph.co.uk/travel/food-and-wine-holidays/best-destinations-for-wine/

Some quotes from the article:

“The tourism business structure has changed. It used to be mainly male, mainly people who already knew about wine. These days, we’re taking couples, younger people and small groups of friends.”

“Travel itself is now cheaper and easier. And wine is almost always produced in beautiful places to which you’d want to go anyway.”

“Like no other agricultural product, wine also acts as a passport to the heart of these lands, their culture and past, their food, festivals, jollity and people. Especially the people.”  

Customer experience: An Aussie abroad

The obligatory 'Euro Trip'

Australians are notorious travelers, and I often encounter them even in the most remote, furthest flung parts of the world. This is perhaps driven by our remoteness from the rest of the world, and the desire for Australians to 'see what else is out there'.

It is customary for many young Australians to take a trip to Europe. This trip often takes place at a key 'coming of age' moment (either between high school and university, or between university and full time work). 

In my case, I traveled in Europe in 2013 for nine months between college and starting work. Two memorable moments of this trip were my visits to two of Europe's wine regions: Burgundy (Bourgogne) in France, and the Duoro Valley in Portugal. These two experiences shaped my relationship to wine.

Burgundy

I arrived in Burgundy with my girlfriend halfway through my European adventure. We were in our early-mid 20's and were still developing our palate for wine. We were also slightly disheveled in our dress after traveling for an extended period.

We excitedly called some wineries and tasting rooms to see if they were open. We made appointments where necessary. However upon arriving at almost all of these wineries we were met with what (felt) like looks of disgust. The purveyors looked us up and down and (seemed) to think "Who are these scruffy, young, uncultured tourists? They clearly have no money to spend, so why should we bother with them?".

Several vineyards told us they were closed and could not see us--this was despite the fact we had phoned ahead and they'd told us they were open. We also saw older, wealthier looking couples merrily walking in and out of these same vineyards carrying cases of wine. We felt bitter and resentful--we weren't excited to drink Burgundy wine anymore.

Eventually we found a local gentleman who would serve us. He was a teacher at the local sommelier school, and he walked us through a private half-day course on wine tasting, and on interpreting the local naming and labeling conventions. This gentleman salvaged our Burgundy experience for us.

Duoro Valley

Later next month we arrived in Porto in Portugal, and planned to take a tour of both the tasting rooms in that city, and the wineries in the nearby Duoro Valley. Porto is famous for its (eponymous) port wine, of which we both had never tried and knew nothing about.

Upon touring the Duoro Valley we were pleasantly surprised by the warm welcome we received by the various wineries. And a local tour guide even took us to a tiny, dusty hole in the wall (filled exclusively with elderly men) where the bartender offered us a tasting of 100-year old tawny port for what felt like only a handful of Euros.

The value of customer experience

Since visiting Burgundy, I have had a begrudging relationship with French wine (‘it is snobby, overpriced, overrated’); since visiting The Duoro, I affectionately seek out the wineries I visited when scanning a wine list (‘they are quality and value for money’) and I’ve developed a taste for Port.

This has taught me the value of customer experience: a tasting or visiting experience can make or break a customer’s impression for a lifetime.

Wente - why didnt it become Monsanto?

A slew of posts from me, as I've been a bit delinquent, but this is a short one.

So, I asked the question in class, but I still wonder, why didn't the Wente family patent their strain of the Chardonnay, the Wente Clone.

Monsanto is a massive, U.S. agricultural and agrochemical company, which was bought by Bayer last year in a $66Bn merger. The reason I mention Monsanto is that they have been producing genetically modified strains of corn and other agricultural products for decades. In addition to creating such strains, they have also been patenting these strains as proprietary inventions. While Monsanto is an unpopular name among the general public, they have been using GMOs and now new gene editing technology, such as CRISPR to create new strains of crops for decades. They are then able to sell these crop strains to other farmers and reap substantial financial benefits. There was even a Supreme Court case (too many legal references, I know), upholding their patents in 2013 and their right to control the distribution, sale, and use of such products.

One wonders why the Wente family, with its extremely popular chardonnay clone, never patented their own genetically modified strain. Perhaps being a wine grower in a small community means something different and leads to more humanistic tendencies than a pure profit seeking company. Had the Wente family had the foresight, however, they might be able to extract large rents from all the wine growers across the state who make the very popular Chardonnay with the Wente Clone (then again, that might mean higher prices for all the white wine drinkers out there). Any way food (or rather cheaper Chardonnay) for thought.

Legal Opinions are No Fun

Ok so this post is a little bit stale, having sat in my drafts for a while, but here it goes:

In class two weeks ago, we heard about the 21st amendment's 2nd clause, the three tiered system, and Granholm v. Heald (including meeting with the lawyer who argued it in front of the Supreme Court - no small feat and a true honor to get to hear from her). When discussing the ability of the federal government to regulate beer, wine, and liquor under the commerce clause, many thought that was unfair and that the rules were complex and out-dated.

The history of Supreme Court ("SC") rulings regarding the Commerce Clause, however, yields a much more complex history. In the early 1900s, the courts operated under the decision of the Lochner case, known as the "Lochner Era", where the SC used the Due Process Clause of the 14th amendment to protect economic rights, i.e. freedom to contract. This meant that state laws establishing minimum wages, limiting the number of hours worked, or price floors were illegal. It would also have meant that imposing labor standards, such as maximum hours for women, would have been illegal (but the courts justified protecting women as they were viewed as a separate class at the time). This changed during FDR's presidency and the New Deal. After FDR threatened to pack the court, the SC upheld a law enforcing minimum wage under the theory that the constitution does not protect freedom to contract, only the inability to deprive someone of their liberty without due process of the law.

For the purposes of this class, however, there are several laws and rulings that were passed regulating agricultural products that the SC upheld, which are not dissimilar from the laws regarding production, distribution, and sale of alcoholic beverages. In midst of the Great Depression, several laws were passed to limit the production of agriculture, such as wheat, milk, etc. In 1942, in the case of Wickard v. Filburn, the SC upheld the Agricultural Adjustment Act which limited the amount of wheat a farmer can grow, which was intended to control supply and thereby stabilize prices. Filburn argued that he should be allowed to produce additional wheat outside of his quota for personal consumption by his family and his livestock. The SC disagreed and upheld the law, stating that if he and other farmers all did the same thing, then in aggregate their additional production would impact consumption and impact the market (what became known as the "aggregation principle"). Therefore, even though the production did not enter the "stream of interstate commerce", the behavior would impact the overall market in aggregate and therefore could be regulated.

In the case of conflicting state vs. federal law, the SC can act as a good arbitrator, such as in Granholm, but in other instances, Judicial Activism may not be as favorable when Congressional Acts that many support are overturned. In Granholm, the class was clearly excited for the SC to overturn what was an apparent conflict between state law and federal law, whereby State law tried to advantage in-state producers and sellers, over out-of-state producers. The SC, as we know, held that this was in contradiction to the Commerce Clause and that the 21st Amendment was not regulating interstate commerce, only creating a uniform system by which all states, and those businesses within them, had to operate. While we may applaud the SC for its decision in Granholm, there are other cases in the modern era of interpretation of the Commerce Clause, where the SC overturned various Acts as not substantially related to the Commerce Clause. In U.S. v. Lopez, which ushered in a modern era of interpretation concerning the Commerce Power of Congress, the SC overturned the Gun-Free School Zone Act and held that Congress could not prohibit the possession of firearms in school zones, as there was only an attenuated link to interstate commerce for guns, and therefore an inability for Congress to regulate them near school zones under the Commerce Clause.

So while we may think that Congressional laws regulating various economic products across states should not necessarily exist, such as in the case of alcohol, there is a long history of why it may be necessary and why, in the case of Granholm, the use of the Commerce Clause is helpful in order to overturn discriminatory State laws towards out-of-state producers.