Michael Fridjhon: Commodity versus terroir wine

By , 25 September 2019

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It’s not difficult to make good wine: other than a reasonable winery and a degree of technical competence, all that you need are plentiful supplies of healthy grapes. Not tiny bunches with tiny berries harvested from ancient vines growing in obscure sites mid-way up steep slopes – just healthy wine grapes from any number of tried and tested varieties, competently farmed and fit for purpose. There are also plenty of places where suitable grapes can be farmed: all you need are ample supplies of water, reasonable sunlight, and a temperate climate. Torrential rain, high humidity, gale force winds are all weather conditions to be avoided.

La Mancha in Spain is perfect for this sort of production. It’s inland, the soils are homogeneous, there’s enough irrigation water to ameliorate the semi-desert conditions, and the ground is pretty flat so much of the farming can be mechanised. Unsurprisingly, it is the largest continuous vine-growing region in the world. At 190 000 hectares, it’s twice the size of the entire South African vineyard area and produces closer to three times our annual production. It has seven times the number of growers, but half the number of wineries.

When it comes to being in the wine business, La Mancha is one kind of “place.” But there are other kinds of wine “places” – tiny sites in the midst of well-known wine-producing regions where the fruit that is harvested delivers a palpably better result. The vines aren’t always significantly older – Leeuwenkuil’s Heritage block in the Swartland is probably only halfway to old vine status – nor do they have to be planted on vertiginous slopes.

Often there’s no satisfactory explanation for why one such site is better than a neighbouring block. I once stood with the owner of the Domaine de la Romanée-Conti overlooking his two most prized vineyards, Romanée-Conti and La Tache. They are divided from each other by a very narrow block (“La Grand Rue” – about 30 metres wide) owned by another proprietor. They are pretty much at the same altitude. They are farmed in exactly the same way, and vinified in the same cellar, by the same winemaker. When the wines are young it’s sometimes difficult to tell them apart. As they age, they evolve differently. No one has yet come up with a plausible and complete explanation for why the difference between the two wines relates to differences in the geology (or anything else) of two near-adjacent sites.

You can’t produce Romanée-Conti in La Mancha, nor could you produce in Vosne-Romanée the very acceptable La Mancha table wine which sells in tanker-loads. They are made for two entirely different markets, at price-points so far apart that for every bottle of current release Romanée-Conti you might buy, you could actually purchase over two containers of table wine from these relatively newly laid-out vineyards in the heart of Spain.

Some wine writers and the geekier consumers think that this commodity versus terroir wine dichotomy must lead to a fatal outcome for one of the combatants. If price alone is what drives the market, the La Mancha option must necessarily overwhelm fine Burgundy. But what is empirically clear that both have a place, and the market determines – to a greater extent – the risks and rewards of each option.

For South Africa, the problem at present is that our Burgundies are being overwhelmed by our La Manchas. The state of the economy, the loss of premium consumers (to recession down-buying, to emigration and to the Grim Reaper) has shifted the balance of power so that many of the fine wine sites are under-recovering on their operating costs. The fear is that they may soon succumb to urban creep. At the same time, our La Mancha grape growers along the Orange River are flourishing, their business booming as the economy forces existing consumers to buy down, and as many newcomers to wine respond to the attraction of brand before recognising the value of origin.

This is not a problem which can be solved by government intervention – through a more buoyant environment (something which is partly in the power of politicians) would certainly help – as would a clear statement from the authorities that rezoning of agricultural land for high-density residential purposes will never be permitted. The solution must come from consumers who refuse to pay a premium for non-premium wine. As long as wine drinkers allow brand owners to use (admittedly perfectly good) cheap juice there’s no incentive for them to buy fruit from the premium appellations. If the great estates of the Coastal Region are to survive, they have to ensure that the wines they make are distinctive enough to warrant the premium they need to charge. The fact so many aren’t anywhere near breakeven suggests a lack of competence and a lack of imagination.

The ever-increasing availability of reasonable quality cheap wine from irrigation areas is what is nowadays called “disruption” – no different from the impact of Uber on the taxi industry and AirBnB on the hotel trade. Those who do not adapt will perish, and VinPro, for all its appeals for higher grapes prices, will not be able to save them. The growers have driven their wine farms into the ground. They’ve had so little money for so long that they now cannot afford to replant their virused vineyards. The ever-decreasing yields of ever less attractive fruit will never be worth the kind of money which would make the farm a viable proposition.

Delaire Graff Estate, Stellenbosch.

If South Africa were to become an investible proposition, international buyers would arrive to take them out of their misery. Laurence Graff bought the rundown Delaire farm and turned into an iconic property. This isn’t going to happen for the many other properties which today are like Delaire was 15 years ago – not as long as the land issue remains unresolved, and not as long as political uncertainty prevails.

  • Michael Fridjhon has over thirty-five years’ experience in the liquor industry. He is the founder of Winewizard.co.za and holds various positions including Visiting Professor of Wine Business at the University of Cape Town; founder and director of WineX – the largest consumer wine show in the Southern Hemisphere and chairman of The Old Mutual Trophy Wine Show.

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    Billabong | 11 October 2019

    A very well thought out article. Virus affected vineyards need be replanted as a courtesy to neighbouring farmers. Either that or they should be left fallow. That’s the only way to avoid a downward spiral. And foreign capital has no interest in investing under the current land expropriation climate. Literally zero interest.

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