Friday, January 21, 2005

What Happened to France? The French Wine Paradox (NW)

French wines no longer hold their place on the world stage. However, France still produces many of the world's greatest wines. As a result, a great paradox has developed. Let's look at Bordeaux as an example. The classified growth wines (1st growth, 2nd growth, etc), and the super-premium unclassified micro-chateau wines that have achieved great fame over the past few decades, are at the top of the class. They are some of the greatest wine achievements on the planet and a benchmark for wine production in every corner of the world. As a result, the supply and demand of these wines has elevated prices and there is no reason to believe this will change. The problem in Bordeaux is with the rest of the wines. There is a glut of wine being produced at the lower end of the scale which is rapidly losing its appeal in the global marketplace, and in particular, in the American marketplace.

The United States is the single largest wine consumer in the world; not on a per capita basis by any stretch but on a total consumption basis. As a result, wine producers who figure out how to market to Americans will figure out how to sell a lot of wine. French wine makers have lost touch with how to accomplish this. Common, every-day Bordeaux wine is now nearly absent from shelves in American wine shops due to several factors, such as the French focus on confusing proprietary blends not varietals, confusing labels, the difficulty of pronunciation, and little creativity in distribution techniques. What has replaced it? Of course, the initial wave was inexpensive varietal wine from California. The second wave was wine from Italy, which for the past decade has been the largest exporter of wine to the United States. In 2004, however, Australia stole the number one spot. Why is this? Think about your own experiences. Australian wines are focused on varietals or clearly identified varietal blends, they have easy-to-read labels, there is no language barrier, and they have developed major distribution in the inexpensive price range to wine shops and supermakets all over the country. The Aussie wine makers have figured out the American marketplace. Present wine drinkers with easy-to-read, tasty, varietal wines at a reasonable price and a lot of wine will be sold. A major overhaul of Bordeau wine production would be necessary to re-market their everyday wines to the United States. However, this transformation is not happening and Bordeaux is suffering. While the world-class wines they produce are being snatched up faster than ever by restaurants, collectors, and the affluent baby boomers who are discovering new hobbies and leisure, bankruptcy is threatening wine producers all across the region. Thus, the great French wine paradox, which is painfully obvious in Bordeaux.

What will happen? I don't forsee revolutionary changes in lower-end French wines happening any time soon. Even if the industry turned upside-down, consumers are fickle and preferences change. Right now, the Australian model is dominant and is being replicated by New Zealand, South Africa, Chile, and Argentina in their approach to the U.S. market. Can you believe the way the restaurant wine lists have changed in the past ten years? Take another good look the supermarket wine aisle. All of Europe is poorly represented and France is almost non-existent. My local grocery store, a regional chain, carries only one bottle of Bordeaux and 20 bottles of French wine in total. In comparison, the shelves hold 100 bottles of Australian wine and 400 bottles of domestically-produced wine. Are we missing out? Yes. But in the meantime, there is pleanty of excellent wine from all corners of the world to enjoy. Raise a glass! -NW

1 comment:

Anonymous said...

There are signs, though, that French Vintners are figuring out, at least part of the American marketing "thing". French wines are coming out with names like "Old Fart" and other, (equally un-appealing) easy to pronounce names.

See this article on CNN from last year:
http://money.cnn.com/2004/08/19/pf/goodlife/french_wine/