Since last summer, I’ve been thinking a lot about the relationship between wineries and wine blogs. There didn’t seem to even be one six months ago; bloggers blogged, and wineries produced and sold wine the old-fashioned way, through the three-tiered system and using traditional public relations and marketing techniques. Between these two extremes, there was little to no communication.

But then came Rockaway-gate, in which Rodney Strong released a pricy new Cab only to bloggers. That was a hint that wineries had become aware (and in some cases, acutely so) of the blogosphere’s existence, and were trying to figure out how to use it. That was followed by last month’s North American Wine Bloggers Conference, which startled me and, I think, most of the other bloggers who went, by the omni-presence of winery representatives and winery P.R. types. They practically outnumbered us actual bloggers! That was another confirmation that wineries are taking blogs seriously, even if they don’t quite know what to do with them.

So it was interesting to come across this post from a blog called WineDiverGirl, and entitled Wineries for Bloggers. In it, the author asks wineries if they “support, acknowledge and encourage bloggers to engage with your winery.” She suggests wineries use social media (Twitter, blogs, etc.) to interact with a generation that seems to live online. WineDiverGirl quotes another blogger, Julia, a Digital Girl, who defines social media as “people having conversations online.” The theory behind WineDiverGirl’s suggestion that wineries ought to support what she calls “the blogging industry” is that the times they are a-changing, and “In 2008, if you’re not on a social networking site, you’re not on the internet.” And if you’re not on the Internet, you’re in Siberia.

I’ve disagreed with the triumphalist predictions by bloggers that the “old media” is dead and that any minute now, everybody will stop paying attention to magazines and newsletters. That’s just wishful thinking. But I do believe that WineDiverGirl is on to something when she says “wine bloggers are here to stay” and wineries need to engage them. If I were giving advice to wineries — including some ultra-famous ones, whose owners don’t know the difference between a blog and a bagel — I’d tell them (as WineDiverGirl does) to start reading the better blogs, to scope out Twitter and see how it works, and to consider writing their own blog. This brave new online world may not mean much to an older generation of winery owners. But if it really is a wave-of-the-future thing, they need to invest themselves in it, physically, intellectually and financially.

Against a backdrop of declining hotel occupancy rates and near-empty tasting rooms along Cannery Row, and with the holiday season looking increasingly bleak, Monterey County tourism officials are bracing for the worst. “November and December will be weak,” predicted a top travel official, quoted in last weekend’s Monterey Herald.

I saw this myself this past week, when I was in Monterey for the county’s Great Wine Escape Weekend, co-sponsored by Wine Enthusiast. (I moderated a symposium on Pinot Noir, and hosted the third annual Wine Enthusiast Dinner at Bernardus Lodge.) While both of these events were sold out — the dinner was $500 a couple — it was clear that Monterey and Cannery Row, the famed tourist attraction on the Bay, were hurting. One official with the winery association told me visits to the area have plunged by 35 percent from last year, and every winemaker I spoke to said tasting room traffic also is off. Cannery Row’s brand new, high-end InterContinental Hotel is beautiful, and has injected brand-new elegance into a once blighted block. But its owner, Clement Chen III, was quoted in the Herald as saying “We ran into some headwinds that no one could have anticipated.”

My impression was that hotels like the InterContinental, the Monterey Plaza and others are being kept alive, for the time being, by corporate conferences, not individual tourism. But you have to wonder how long big businesses and academic insitutions are going to be able to afford to send their employees on expensive jaunts, just to have big meetings in hotel conference rooms. As the Herald noted, “…corporate spending and incentive travel…were slower to react [to the economic crunch] because corporate retreats and conferences tend to be booked further in advance.”

One thing’s for sure: Monterey wineries, who have enjoyed quite a bit of success, are looking over their shoulders, waiting for the other shoe to drop. Many of them depend on tasting room traffic to push sales. With that traffic stalled, they’ll have to rely more on distribution channels, never the easist option for the small family wineries that constitute the bulk of Monterey County’s industry.

I love the way the French wine industry is mobilizing to fight off a new round of crazy neoprohibitionist assaults. The entire vignoble, from Epernay to Cognac, Sancerre to Bordeaux, has erupted into angry demonstrations as the rightwing government of Nicolas Sarkozy — like George W. Bush a teetotaler — attempts to push through measures that would profoundly alter France’s thousand-year-old wine culture.

Among other proposed rules, the government wants to raise taxes on wine, ban wine advertising on the Internet and — sacre bleu! — forbid free wine tastings to the public. “This would put an end to free wine tastings in France, the famous en primeur barrel tastings in Bordeaux and the internationally-attended Vinexpo wine exhibition and all other activities involving wine tasting would have to be paid for by the tasters,” according to the blogger Deidre Woollard, at Luxist.

Wine country mayors are siding with the wineries, and angry  vintners have even draped road signs — Sauternes, Barsac, Bordeaux — with banners labeled “CENSURE.”

The legislation is being pushed by an anti-alcohol group, ANPAA (the French National Association of Prevention of Alcoholism and Addiction). Disguising itself as a health-promotion agency, ANPAA for years has been leading the French neoprohibitionist charge. When the French published a White Book on wine, a few years ago, which declared wine to be a “food or a nutritional ingredient,” ANPAA called it “a very dangerous statement which will clearly put the health of citizens at risk.”

There’s even been legislation proposed that would equate wine with pornography, in limiting Internet wine sites from posting outside of certain late-night hours.

We’re seeing neopros muddying the waters all over the world, from emergent Africa through the Far East, down in Australia, here in the U.S. and, obviously, in Europe. Most of the time these reactionary forces profess a concern for the health and safety of citizens, and they may be sincere when they claim it. But their “solutions” all too often take a chainsaw approach when a scalpel is called for. No more free wine tasting in France? It makes the mind reel.

I can’t imagine things going as far in this country as they have in France, but if they did, would our vintners rally? Would they be marching in the streets of St. Helena and Santa Barbara, putting up “CENSORED” banners on road signs along the 101 Freeway? I’d be right there with them.

By now, just about everybody who went to the Wine Bloggers Conference –a three day symposium for wine bloggers, media innovators and wine industry leaders held last weekend in Sonoma, California– has blogged on it. In fact, most of them did it live from the conference. I didn’t, because, among other things,  I don’t understand the idea of blogging live when no one is actually reading you in real time. It’s a twist on the old Zen koan, What if a tree fell and nobody heard?

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I just got back from Paso Robles, where I emcee’d a series of tasting dinners for their annual Harvest Wine Weekend. (Wine Enthusiast is a sponsor of the event and I was there as West Coast Editor.) One of the things I wanted to check out on this visit was how the Central Coast economy is doing, particularly as it relates to wineries and restaurants. So I talked with as many people as I could, and found out that the news is a mix of good and bad, with the bad getting badder.

Gary Eberle, from Eberle Winery and an old friend, told me that sales in his tasting room — arguably the best known and most crowded in Paso Robles, and an important source of revenue for the company — are down from last year, although he hopes to make up the difference with increased wholesale. This message was repeated to me by Staci Jacob,  executive director of the Paso Robles Wine Country Alliance. That sounds like a plan, but it also makes me wonder. Don’t wholesale and retail march together? Can one go up while the other goes down, or is there a time lag, as there is between the price of a barrel of oil and the price at the pump?

Staci also told me that sales at downtown stores — the winery tasting rooms, clothing shops, furniture outlets and boutique galleries that are so important to Paso Robles’ tax base — are trending downward. I could confirm that visually; in my strolls around town (still rebuilding after the devastating 2003 earthquake), the sidewalks were practically empty, although it was a beautiful, 90 degree Indian summer Saturday afternoon. (To be fair, most of the tourists may have been at the various winery open houses at that time of day.) On the other hand, Artisan restaurant, where the Wine Enthusiast dinners were (and it’s a fabulous restaurant, by the way) was jam-packed, and the diners who paid $400 per couple for my wine tasting dinners didn’t seem to be hurting. (Proceeds from the dinner went to local farmworker organizations.)

Paso Robles now has over 200 wineries, with more and more coming online all the time. Many of these are started by wealthy Southern Californians who want to buy a “lifestyle.” As a wine region, Paso’s come a long way since I first started tasting their wines. It’s carved out for itself a distinct identity, and there’s tremendous civic pride in the local wine industry. (The presence of the Mayor at my table seemed symbolic of the value Paso Robles places upon the industry.) We all had a great time at the dinners. But I couldn’t help but think of the declining sales, the empty stores, and — to add insult to injury — what are bound to be far lower than usual crop yields this year in California, which will confront vintners with yet another cruel choice: whether or not to raise prices. They’re damned if they do, and damned if they don’t.

It’s called the BIRG effect: Individuals will tend to ‘bask in the reflected glory’ of associations with successful others. This is why political candidates love to have their picture taken with Senators and Presidents. Now, a new paper examines the BIRG effect as it applies to ambitious wineries who maybe haven’t been doing so well. In order to bask in someone else’s glory, they pay big bucks to hire a celebrity winemaker, then announce it to all the world. “Hey! Michel Rolland — the guy who helps make Harlan? He’s now our consultant!” You can substitute, say, Helen Turley (“She made Screaming Eagle!”) or whoever you want, it’s the  same thing. Ditto for a celebrity grapegrower like David Abreu. “Did you know that the guy who grew grapes for Staglin and Araujo is now my viticulturalist?”

Michel Rolland

Here’s the psychological explanation, according to the paper’s authors: “Movement of a skilled employee from one organization to another creates an indirect affiliation between the hiring organization and the former employer.” Imagine having your winery associated in peoples’ minds with Harlan, Screaming Eagle and Araujo!

The paper is called Basking in Reflected Glory: Symbolic and Substantive Implications of Winemaker Mobility. It was recently presented to the American Association of Wine Economists by three professors, two from Emory and one from Harvard. In one of their weirdest findings, they discovered  that “the hiring winery is likely to receive increased market attention even before the new winemaker has a chance to influence the quality of wine produced at the hiring winery.” [italics mine]

Even assuming that hiring a famous consulting winemaker will improve quality, that improvement cannot possibly be for years. Time is needed for such things as vineyard replanting, or even rebuilding an entirely new production facility (which people who hire Rolland et. al can afford to do). The paper’s authors saw that prices rise before any improvements can have occurred. This led them to conclude “This is evidence of a symbolic effect without a corresponding substantive effect… evaluations and assessments of others may be enhanced even in the absence of actual performance improvements attributable to the affiliation.” [italics mine]

That’s a pretty amazing statement. It means that people are willing to pay higher prices for wines based solely on subjective, psychological perceptions, rather than on any inherent wine quality. I’m shocked, shocked.

Wines & Vines magazine published an article yesterday reporting how the Washington State Liquor Control Board is launching a “year-long pilot study allowing certain supermarkets to host wine and beer samplings [tastings].” The program will begin with 30 independent and chain stores chosen at random. The program sunsets in September, 2009, but if all goes well, the WSLCB could extend it, and even make it permanent.

This is a progressive step for the Board (and Washington’s state legislature, which authorized it) to take. We have such a schizophrenic attitude toward wine tasting that it just doesn’t make sense any more. The neoprohibitionists and MADD types complain that anything that expands the public’s access to wine and beer tasting will result in more carnage, but if you think about it, that argument falls on its face. Let’s say Safeway has an in-store wine tasting. (The chain was chosen in the random selection, and plans to have 12 tastings throughout the next year at each of seven participating stores.) Imagine a little table set up where a representative of Chateau St. Michelle (for example) is pouring Chardonnay and Syrah. I can’t see any pourer in her right mind who would (a) allow someone underage to drink or  (b) allow anyone to get plastered. According to the WSLCB’s website on the pilot program, each participating store “is responsible for monitoring the tastings to ensure minors or apparently intoxicated persons are not served alcohol.” Not only that, “Liquor enforcement officers will attend each store’s first tasting” and also will make “unannounced visits and compliance checks.” If store employees do the pouring instead of winery reps, they will have to “complete a WSLCB-approved limited alcohol server training program prior to participating in a tasting event.”

This is the smart way to do it. Here in California, it’s ridiculously hard for a supermarket to do wine tasting. Even most fine wine stores are prevented from doing so due to our arcane laws. The California legislature has shown some vision in liberalizing tasting privileges, as for instance this past August when it passed (and Gov. Schwarzenegger signed into law) a bill allowing wineries to sell wine by the glass and by the bottle. It would be refreshing if the lawmakers now went a step further and made responsible off-premise tasting easier.

Mike Veseth, a political economy professor at the University of Puget Sound (Washington State), has a new post on his blog on the impact of the economic crisis on wine. “The squeeze is on,” he writes, as shrinking credit markets, declining retirement accounts and a sense of fear combine to send Americans downscale.

Veseth is voicing what a lot of people are thinking and feeling: We’re heading into tough times, and wine drinkers are having to readjust their [our] previous practices. One result of all this is that the concept of “value wines” has taken on new meaning, for producers, retailers, restaurateurs and, yes, wine magazines. People are looking more toward wines where the bang-for-the-buck is high. A few days ago, Slate magazine published an article on “drinking on the cheap” that reflects a glass-half-full/half-empty point of view: Amidst all the gloom and doom, some people, at least, are still shelling out plenty of cash for top bottles. Two weeks ago, the Chicago wine auction house, Hart Davis Hart, had its fourth biggest take ever, raking in more than $11 million. But, of course, those were high rollers, not the supermarket strollers who walk the Wine Wall with angst.

Here in Oakland, I see evidence of the crisis in direct ways. Over the last several years we’ve had a boom in wine bars. But just since the end of summer, almost every wine bar in town has had to drastically rejigger their basic business plan, in order to offset declining revenues. “The Oakland wine industry is struggling to avoid following Bear Stearns and Merrill Lynch into the black hole of economic meltdown,” my friend Rick Mitchell told me. He’s proprietor of Franklin Square Wine Bar, and last month he lowered prices across the board, willing to take a bare profit in hopes of staying alive. Another wine bar in my neighborhood, Vine, started out selling exclusively small-lot California wines, but now has shifted to an international (read: Southern Hemisphere) focus. Local tasting rooms at member wineries in the East Bay Vintners Alliance are struggling to stay open. Just a year ago, the City of Oakland was planning on turning a defunct, Beaux-arts terminal building into “an East Bay wine-making collective, tasting room and waterfront restaurant,” according to the Oakland Tribune. Now, that idea is dead in the water.

Here’s something else Rick told me: “In a way, all this is good news for consumers who can expect lower pricing on wines at their favorite wine bar.  The downside is that if consumers don’t respond to the lower prices, there won’t be any East Bay wine bars left when the economy finally turns around.” I’d add only that it’s not just the East Bay that’s hurting, it’s everywhere in the country.

Jean-Charles Boisset, the firm’s scion, today confirmed a published French report that the family firm, Boisset Vins et Spiritueux, has sold its entire spirits portfolio to La Martiniquaise, a Paris-based company that is the second-largest spirits group in France, with 24% of that country’s market share.

Reached in San Francisco, where he had just returned after penning the deal in France, Boisset explained the family’s decision to sell. “Spirits was a very good business to be in, but it’s a very competitive marketplace, more and more controlled by major international companies, so we felt we could be much stronger by focusing on one business, super- and ultra-premium wine.”

Jean-Charles Boisset

Last year, Boisset sold the American part of its spirits division to Kentucky-based  Heaven Hill Distillers. Among the spirits brands La Martiniquaise acquires from Boisset are The Greyhound Scotch Whisky and Rhum du Verso. But Boisset said his company will keep their popular Idol Vodka, since it’s made from Chardonnay and Pinot Noir grapes.

Boisset is the largest winery in Burgundy, second largest in Beaujolais, and #3 in the Rhone. Its California properties include DeLoach and Lyeth.

Boisset  would not reveal the selling price, but said the cash will be used “to further organic [practices] in our existing brands, to identify strategic opportunities in the premium wine business in North America, and to develop our Cremant de Bourgogne sparkling wine business.” The company’s new name, he added, will be Boisset Family Estates.

We here in the States, and in California in particular, sometimes get so caught up in the domestic wine scene that we don’t realize the tremendous things happening overseas.

While we’re fussing over the latest 97 point cult Cab, the center of gravity of the wine world (along with all our money) is shifting to Asia, specifically China and India. Both are emerging as major wine-consuming and wine-producing regions. The long range repercussions are staggering.

Last Spring, I blogged about a Berry Bros. & Rudd Future of Wine report predicting that China will be the world’s leading producer of wine in 50 years, with Cabernet Sauvignons and Chardonnays “of real promise.” Just 2 weeks ago, the International Herald Tribune reported that China could soon become “the new Chile”, “a font of quality and affordable wines,” and be “the world’s eighth largest wine consumer by 2012.” It’s currently the ninth largest and the sixth biggest producer. And just yesterday, a leading market research firm announced that China has now become the largest national beer market in the world.” Where beer leads, wine follows; the only thing holding wine consumption in China back is the immaturity of the sales and distribution system, but that’s improving fast.

In India, with a population over one billion, per capita wine consumption is exploding at 25% a year, as a new middle and upper middle class emerges in the big tier 1 cities, like Mumbai and Dehli. Check out this telling quote from a recent analysis of the Indian market:

“Now even [in] the emerging tier 2 cities working professionals and younger generation are also consuming wines a lot…a large teeming population under 30 years old and estimated around 650 million will witness [an] attitudinal shift in alcohol consumption and shift to develop a penchant for wine.”

Last month, the Indian government officially established a National Wine Board to “tap domestic and export markets.” And just a week ago, a new report predicted that Indian wine consumption will nearly double in just the next 2 years.

Old Europe is worried, as well they should be. They’re attempting to hold onto their centuries-old wine dominance. The EU is currently engaged in a major trade dispute with India over tariffs on European wine being imposed by various Indian States. The Europeans understand that the difference of a few rupees may determine whether hundreds of millions of Indians buy their wines or someone else’s.

At virtually the same moment, a group of California wineries was meeting at the Wine Institute to hash out their own global marketing plan to tap into that huge emerging market. They’ll have their work cut out for them. A few months ago, the U.S. Dept. of Agriculture issued a World Market and Trade bulletin that warned “…due to their late entry, U.S. winemakers have yet to gain a significant market share [in China] relative to their European counterparts, or relative to other latecomers such as Australia and Chile.”

I’d love to hear from people, especially younger ones, if you can imagine ever buying a cult wine, or an everyday one, from India or China.