Expert explains shifting market in global wine-making

New technology and increasing production roils market, expert says

By: Alex Gennis
   New technology and increasing production of wine by non-European countries have significantly changed the wine industry over the past several decades, Philip H. Ward, a wine expert and the eastern sales director for Bernard Magrez, an acclaimed wine company, said Wednesday at a talk at Princeton University’s Prospect House.
   "It’s our generation that really changed what’s happening with the wine business — it has become very dynamic," Mr. Ward said to 30 Princeton students. "When I started in the business as a chef, we only drank French wine."
   Today, a number of countries — including Australia, Chile, Argentina and South Africa — are major competitors of more traditional wine-producing countries, such as France, Mr. Ward said.
   "Look at what’s happened with Australia," Mr. Ward noted. "They have taken the world by storm." Yellow Tail, an Australian brand, has revolutionized the wine industry and has rapidly become a leading brand in the United States, he said.
   "Yellow Tail is now selling 8 million cases in the U.S., even though it did not exist six years ago," Mr. Ward added. "It owns some vineyards, but it is buying mostly fermented juice and adapting it to American taste."
   Since the United States has only recently emerged as a major market for wine, the domestic consumers rely heavily on wine scores given by critics, Mr. Ward said.
   "(Consumers) are buying wine for its scores because we are a young wine nation," he explained. "We used to drink soda pop. We rely on third-party endorsements for wine buying."
   While the 100-point wine-rating system has been criticized by some as subjective for relying on one person’s opinion, it works well and is here to stay, Mr. Ward said.
   But he warned that he still recommends that his friends develop relationships with good retailers and ask them for advice because, "(those retailers) will begin to understand the wines that you like and dislike.
   "It’s nice to rely on the scores, but I don’t think they really help us as consumers to understand wine," Mr. Ward said.
   Recent advances in technology have also caused significant changes in the wine business, Mr. Ward said.
   "We are learning how to grow grapes better — we are learning how to make better wine," he explained. "There is not a whole lot of bad wine out there today. Most of the wine is very drinkable and very serviceable."
   New technology has made wine more appealing to a broader group of consumers by enhancing the taste of cheaper and younger wines, which are more readily available, Mr. Ward said.
   In fact, large discount chains are now the key players in the U.S. wine market, and are starting to drive out small independent retailers, he said.
   "Costco has come out of nowhere to be the largest purchaser of wine in the U.S.," Mr. Ward explained. "The mom-and-pop stores are holding on by their fingertips, hoping the lottery will pay their rent."
   As with almost any other business, the Internet has become a vital tool for the wine industry, Mr. Ward said.
   "I think (the Internet) is good for business," he explained. "If wine is limited production and it is not available in the state where you live, why not have a way to be able to buy that wine?"
   In expressing his dislike for the "neo-prohibitionists" in the U.S., who would like to see the wine industry go out of business, Mr. Ward, a trim man of 55, noted that he believes wine taken in moderation is very beneficial for people’s health.
   "Every night, my wife and I drink a bottle of wine with dinner, at least," he said. "And I have weighed the same for the past 15 years. It really is a wonderful beverage."