Sunday, March 18, 2007
WINEAMERICA & WINEGRAPE GROWERS OF AMERICA, the two national organizations representing wineries and growers, are in Washington this week for their annual conference and visits to Capitol Hill. More than 60 delegates from across the country, including 10 from New York State, will carry the industry’s message to Senators, Representatives and the Administration. The message: The American wine, grape and grape products industries generate over $162 billion annually for the American economy, have enormous growth potential, and could contribute even more under a better business climate created by enlightened public policy. At the top of the list are two key issues: rebalancing federal policy and budgets with greater support of “specialty crops” like grapes and wine, apples, vegetables and maple syrup; and enacting reasonable legislation on immigration reform to alleviate the crucial labor shortage in agriculture and many other industries. The first issue will be addressed by imminent legislation called the Equitable Agriculture Today for a Healthy America Act (aka, the EAT Healthy America Act) that would increase the competitiveness of specialty crops through technical assistance and grant programs; enhance nutrition by expanding the fruit and vegetable snack program in schools and developing new nutrition programs; invest in vital research; and increase research funding and programs to prevent invasive plant pests and disease. Historically, specialty crops have been largely overlooked by the federal government in favor of “program crops” like corn, wheat and soybeans, grown mostly in the Midwest, which receive massive federal production subsidies (which we do NOT want for specialty crops). There finally appears to be growing recognition in Congress that specialty crops are not only important to the agricultural economies of many states like New York, but they also fit perfectly with the healthiest of diets like the traditional Mediterranean Pyramid diet, so could help reduce skyrocketing health care costs in the U.S. Specialty crops also produce significantly higher value-added economic benefits than program crops, with just the wine, grape and grape products industries generating $162 billion in economic activity annually—including, let us not forget, $9 billion in federal taxes. Grapes are the highest value fruit crop in the U.S., and the sixth overall. Fortunately, our friends in the Congressional Wine Caucus—with nearly 200 members from the Senate and House—are well aware of that. In fact, it was CWC co-chairman Representative Mike Thompson of Napa Valley with our own Representative Louise Slaughter who unveiled the national economic impact report by MKF Research LLC on January 17. Wine—the tasteful economic catalyst.
FIVS & OIV are somewhat analogous to WineAmerica and Congress, but on an international level. FIVS is a private, not-for profit organization of organizations and companies in the wine, beer and spirits industries from over two dozen countries. OIV is comprised of government representatives from over 40 countries which produce and/or consume wine, grapes and grape products. Both are based in Paris, and fortunately have a good working relationship, with FIVS as a nongovernmental observer at OIV meetings. Based on the principles of “communication, cooperation, consensus” and led by Jim Finkle of Constellation Brands, FIVS develops policies, positions and recommendations involving international trade and other issues which are then communicated to OIV and other international intergovernmental organizations like the World Trade Organization, World Customs Organization, and World Health Organization which all create policies affecting the grape and wine industry. On Friday, on behalf of FIVS, I presented the American national economic impact study to OIV and suggested that a global economic impact study could be very valuable to OIV and other international bodies. Some perspective: The U.S. at $162 billion is only the world’s fourth largest wine producer after France, Italy and Spain, which when combined could surpass $500 billion; adding in the many other significant European wine-producing countries would probably bring the EU total to over $1 trillion. And let’s not forget the large industries in South America, Australia and New Zealand along with, alas, an emerging industry in China which already has a large table grape industry. It’s hard to imagine what the total global impact would be, but it’s important to know so policy makers around the world better understand the impact of their actions. Will it happen? We’ll see…
WINE FARMING is risky business, as our friends from Australia reminded us in describing the effects of their second consecutive drought and small crop—a mirror image of New York except ours was caused instead by severe winter freezes or hurricanes. Ironically, this problem is solving another problem: a glut of Australian wine. Not long ago, due to large crops and other factors, our friendly competitors Down Under were awash in wine; now they’re facing a shortage. And while prices paid for grapes may be high, there won’t be many grapes for growers to sell. The grape and wine industry is notoriously cyclical, with alternating booms and busts that resemble a roller coaster on a financial chart, but that mostly has to do with human miscalculations of supply and demand. This scenario—whether in Australia, New York, or elsewhere—vividly reminds us that, first and foremost, wine is farming. People on the outside fantasize about the romance of the wine business—gourmet picnics shaded by a canopy of grape leaves in a sun-drenched vineyard, the musical tones of a constantly humming cash register in the tasting room, driving a Mercedes convertible to a nearby five-star restaurant for a multi-course dinner paired with your wines. Ah, yes, the good life. But before you jump in, you might want to check out the long-range forecast—including global warming.
RIESLING RENAISSANCE is happening around the world, both in terms of production and consumption, with positive implications for New York (particularly the Finger Lakes) as a quality-focused niche player. The good news: Riesling sales in the U.S. are growing strongly, consumers are finally discovering its great versatility as an aperitif and food wine, and the Finger Lakes has an international reputation for quality. The bad news: There’s fierce and growing competition from around the world (Germany, where it all began, as well France, Australia, New Zealand, Washington State, Oregon, and northern California, just for starters); New York is likely to remain a comparatively tiny producer; and many consumers are still confused about what “Riesling” will taste like—dry, off-dry, or sweet. In other words, a clear and concise educational campaign is vital, preferably in conjunction with our friendly competitors from elsewhere so we don’t confuse consumers even more. Many German Riesling producers have already made radical changes to their labels, abandoning mile-long words in gothic script for simple minimalist approaches like “way Kuhl dry Riesling” (that’s all that’s on the label, and the wine is really good). There’s no better place to learn about worldwide Riesling trends than at the upcoming International Riesling Symposium on April 23 in Stuttgart, Germany during the incredible Intervitis Interfructa trade show. More information is available at http://www.riesling-symposium.de.