September 11-15, 2017

Not Your Parents’ Wine

France, Italy, Spain and the United States, are among the top wine producing countries, according to the Wine Institute. That’s probably not surprising, as these countries are famously known for their wines around the world. 

But what about other countries like Portugal, Chile and Georgia? These are countries that are producing quality wines that are gaining more and more attention. 
Even within the U.S., there are regions like New York State’s Finger Lakes, Washington State and some areas in California outside of Napa Valley, like Paso Robles and Lodi, that are peaking the interest of consumers—particularly older, drinking-age millennials—notes Gladys Horiuchi, communications manager for the Wine Institute.
“There is a lot of research that shows millennials as being the driver of trying new things,” adds Morgen McLaughlin, president and CEO of Finger Lakes Wine Country. 
“They just don’t want to taste and drink what their parents enjoy.”
The Finger Lakes has been riding the Riesling wave over the past few years, McLaughlin says, which has helped consumers become aware of the Finger Lakes as a wine-producing region in New York State. But the region also produces Pinot Noir and Cabernet Franc, for example, which are low in alcohol and lighter in style, which is a trend McLaughlin is seeing. “I think in general consumers are looking for wines that have lower alcohol, wines that are less than 13 percent alcohol,” she says. “And that helps with all of our wines because being a cool climate our wines are going to be lighter in style, higher acid and lower alcohol.”
Over the past decade, the number of wineries in the Finger Lakes has doubled, according to Finger Lakes Wine Country, a tourism marketing association.
“I think as we are moving into a new, hopefully, growth curve for the economy we are going to see new wineries opening up,” McLaughlin says.
Ted Baseler, president and CEO of Ste. Michelle Wine Estates (Woodinville, Wash.) notes that he also is seeing a demographic change in the U.S. The new generation of legal drinking age consumers are more interested in wine than previous generations, he observes, while there wasn’t as much wine consumption among young adult Baby Boomers or Generation X consumers. In addition, he says, “Per capita consumption in the U.S. market, our primary market, is growing and it’s encouraging to see year in and year out that adult per capita consumption going up.”
Ste. Michelle Wine Estates is the largest producer of Washington wines, producing and selling more than half of the wines in the state. Washington State is the second-largest wine producing state in the U.S. behind California, according to Stonebridge Research: Economic Impact of Washington Wine, 2011. There are about 700 wineries in Washington State producing over 20 million gallons of wine. While about 3 percent of Washington wines are exported, according to the report, Baseler says that the wines in the Ste. Michelle portfolio are performing well in Europe, Asia, Canada (its top market), and he anticipates South America will become an important potential growth market going forward.
On a global scale, country of origin for wine isn’t however, as important as style, notes Spiros Malandrakis, senior industry analyst–alcoholic drinks, Euromonitor International, because the vast majority of consumers do not know much about regions or terroir, he says. 
However, he does point to some regions that he says are showing signs of growth, such as Argentina and Chile as well as Portugal and Georgia.
This spring, Georgia is expected to resume exporting its wines to Russia for the first time since a 2006 embargo, opening a large market for the country, notes Malandrakis.
Georgia, one of the oldest wine producing regions globally, exports wines to about 60 countries with 47 percent of exports going to the Ukraine, 19 percent to Kazakhstan, 6 percent to Belarus and 5 percent to China, according to the Georgian Wine Association. In 2005, Georgia exported 40 million liters to Russia and estimates it will export around 10 million bottles to the country once trade relations are resumed.  
Five Chilean wine brands were named among the most admired wine brands in the world, according to a Drinks International survey released last month. Of 50 wine brands, Chile was the only South American country to have wines make the list. Concha y Toro was ranked No. 1 with other brands being Cono Sur at No. 18, Leyda at No. 28, Santa Rita at No. 30 and Undurraga at No. 47.
Malandrakis also points to Portugal as an emerging wine region saying that the Portuguese economy, in a mild depression, has looked to export its wine for additional revenue. The same situation has occurred in Greece. 
Miguel Nora, ViniPortugal’s manager for North America says, “For many years, Portugal was much more focused on the domestic wine market rather than the export market. But in recent years, especially in the past three or four with the financial situation in Portugal not being the best, sales dropped and producers began focusing more on exports.”
From January to October of last year, Portuguese wine export volume increased by 7.7 percent compared with the previous year, according to ViniPortugal. Over the past two years, the organization has been investing in education internationally, notably in the U.S., which is its main market accounting for nearly one-third of investments. Last year from January to October, the country exported about $27.5 million worth of wine to the U.S. 
Sampling has been the main focus, trying to get consumers familiar with the wines and the grapes from that region. Nora says that Portugal is home to 300 grape varietals, with more than 200 of those only grown in Portugal as of late. With the increased interest in this wine region, other wine producing regions like the U.S., Australia, South Africa and parts of Europe have been planting Portuguese grapes. 
As the wine blending trend continues, Portugal has taken that opportunity to blend its native grapes with well-known international ones to make its wines more familiar to consumers. Nora says an example is the blending Arinto with Chardonnay. Arinto is the main grape of the famous wines of Bucelas, which are described as fine, elegant whites, just north of Lisbon. It is used to make characterful, rich, mineral white wines with fruity notes of peaches and citrus, and sometimes tropical fruits and flowers.
While every wine region has its own special characteristics that make its wines unique, the one common thread these wine regions have in common when trying to get the word out is sampling and education. 
Nora simply says: “When people have the chance to taste our wines, of course they like it, they want more, they buy it. Once they buy more, the retailer requests more. So, it’s a good cycle that we are in right now.”  
Photo Credit, Stu Gallagher Photography
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