Dr Vino's wine blog

Is that a whiff of raspberries and leather you get from that red wine–or a whiff of petroleum? With some premium wines consuming three times their weight in petroleum, don’t be surprised if it is the latter.

My previous postings on the carbon footprint of wine made me want to determine just how much carbon is involved in the making and transporting of our favorite beverage. So I collaborated with Pablo Paster, a sustainability metrics specialist, and we ran the numbers. Our findings have just been published as a working paper for the American Association of Wine Economists, available here as a pdf.

While I welcome your comments on the whole paper, I’ll post some of the key findings here:

* Organic farming has lower greenhouse gas (GHG) intensity than conventional farming but I was surprised that the difference wasn’t greater. Clearly there may be other differences in a local ecosystem but the GHG difference was surprisingly small. But on the whole, it was the transportation that played a more significant role from a GHG perspective.

* Regarding the “food miles” debate, we find that distance does matter.

* But not all miles that a bottle travels are the same. Efficiencies in transportation make container ships better than trucks, which in turn are better than planes.

* Shipping premium wine, bottled at the winery, around the world mostly involves shipping glass with some wine in it. In this regard, drinking wine from a magnum is the more carbon-friendly choice since the glass-to-wine ratio is less. Half-bottles, by contrast, worsen the ratio.

* Shipping wine in bulk from the source and bottling closer to the point of consumption lowers carbon intensity.

* Light packaging material such as Tetra-Pak or bag-in-a-box has much less carbon intensity.

* Using oak chips is a more carbon friendly alternative than oak barrels, particularly those that are shipped assembled and empty around the world

* There’s a “green line” that runs down the middle of Ohio. For points to the West of that line, it is more carbon efficient to consume wine trucked from California. To the East of that line, it’s more efficient to consume the same sized bottle of wine from Bordeaux, which has had benefited from the efficiencies of container shipping, followed by a shorter truck trip. In the event that a carbon tax were ever imposed, it would thus have a decidedly un-nationalistic impact.

What does this mean for the green wine consumer? Drinking a wine made without agrichemicals, from larger format bottles, or wine that has traveled fewer miles is the more “green” option. Beyond these points (or in addition to them), you could perform your own carbon offsets, for example, by giving up one bottle for another and saying no to bottled water.

“Red, White and “Green”: The Cost of Carbon In the Global Wine Trade,” By Tyler Colman and Pablo Paster

UODATE: This paper was been published in the March 2009 issue of the Journal of Wine Research
image 1: istockphoto.com

In the chorus of Rhone varieties, Grenache rarely gets to perform solo. But at the most recent lunch for the Wine Media Guild in New York City, we put it on a stage all alone with twenty five examples of the grape from five countries.

Which is the most planted red grape variety in the world? According to our speaker and grenache-o-phile, Jean-Francois Ey, it’s grenache. The grape often appeals to winegrowers because of it’s workhorse-like productivity in early years of the life of the vine. But it may appeal to consumers, particularly as the vine ages, because of wines light in tannin that can have a faint sweetness and high degree of alcohol. Even though the day of our tasting was still warm, it strikes me now as an excellent transitional red as the weather has cooled.

Our tasting consisted exclusively of old-vine grenache. “Old vine” appears to be the wine label term du jour and producers toss it around–like “reserve”–with so little regulation. Jean-Francois, 30, imports several wines from Roussillon under the Ey Vineyards label and put the question of age into perspective for Grenache. In the Mediterranean climate (with no irrigation or fertilizer), the vines take five years just to get going. Then they have 25 bountiful years with abundant yields. But as the vines age, he said, they yields become so miserly that one vine produces enough fruit for just one bottle of wine. At 30-35 years of age, a producer can make good money but after 50 years, they will make good quality he said.

Turning to the wines, we had two white grenache, one rose, several 100% red grenache and some blends, and finally a Banyuls sweet wine. Read more…

Sommeliers unite!
“Almost a dozen” sommeliers in Melbourne are boycotting Tasmanian wine from Gunns Limited because of a perceived deforestation through their new pulp mill. The wine waiters may not be the big guns but, according to one, “Gunns have got a lot of money and a lot of power and we don’t. But we have the power, not through money, but through influence.” ["Pulp friction"]

Red hot red wine
“Château Lafite Rothschild 1996 has been selling at £7,000 ($14,300) per case, up from £4,200 six months ago; Château Mouton Rothschild 1998 has been on the market for £2,600, up from £1,500; and Château Latour 2004 has sold for £3,200, up from £2,050.” [FT.com]

The new pink?
“Citrusy and bright, Picpoul de Pinet is lively enough to be an aperitif, complex enough to drink with cheese or seafood and — no small consideration — affordable enough to indulge in a second bottle while waiting for a perfect partner for more than food.” [LA Times]

Attention deficit
“Financially we don’t mean very much to the state wine distributors, compared to Robert Mondavi,” Mike Reynolds of Hall winery told CNN. “Distributors look at the bigger brands,” he explained, and “our volume does not justify their attention.” A good point in general, but specifically, maybe the $70 million Gehry-designed winery will get the distributors’ attention for the Halls? [CNN]

A contingent future
Buy six and get one…option? Yes, that’s the new futures policy at Cloof Winery in South Africa. Buy six bottles of the 2006 Very Sexy Shiraz and get one option to buy a bottle of their top wine, Crucible. No word on whether the options themselves are tradeable, or what the demand is. [allafrica.com]

A dress made out of wine? Wow, I thought ethanol was a bad fate for the wine glut. But this might be even more, um, creative.

Gary Cass who works at the MicroBe project at the University of Western Australia “noticed that when oxygen got into the vats and turned the wine into vinegar, a slimy, rubbery layer grew on top.” Apparently, Cass saw that and thought “dress!”

The picture to the right shows the “cavewoman” cut of the dress (no word on whether the Goth face paint and wig are also obligatory). “It’s the bacteria that are weaving all these fibers together,” says Cass. “We’re not using any machines, sewing machines and so forth.”

One catch is that it has to be kept wet–wow, wet wine waste dress contests! Just in time for spring break…

“News in Science: Bugs make dress smell like old wine” [abc.net.au]

tags: wine | fashion | fabric

Brian Finn, chairman of Australia’s embattled Southcorp, has issued a letter to shareholders stating that “Foster’s offer of A$4.17 may be just its opening bid.” The Foster’s bid values all of Southcorp at A$3.1 billion ($2.35 billion).

Yet with no other suitor yet emerging, Foster’s controlling 18.8% of Southcorp shares, and Foster’s shares taking a licking in the stock market for fears of overpaying, it’s not clear how Finn hopes to rally resistance to the takeover.

Given that Southcorp barely eked out a profit in the first half of this fiscal year after a A$929 million ($709 million) loss last year, Finn is not bargaining from a position of strength. The combined company would control a third of the Australian wine market, produce Penfold’s, the country’s most expensive wine, as well as the biggest beer, Victoria Bitter.

Will Foster’s raise its A$4.17 per share offer price to meet the market’s 6.5% premium with Southcorp’s shares trading at A$4.44? It’s hard to see them bidding against themselves. As bitter as the news may be for Finn, maybe he’ll switch from drinking Penfold’s to Victoria Bitter.

Southcorp, the struggling Australian wine producer, has rejected a A$4.17 a share take over offer from Foster’s, the brewer and wine maker, which values the company at A$3.1 billion ($2.35 billion) as “inadequate and opportunistic.” The market seems to agree having bid up Southcorp’s shares as high as A$4.50.

Has everyone had a little too much Shiraz?!?

Southcorp’s main brands have not been doing well as they have struggled to successfully integrate Rosemount since acquiring it in 2001 and resorted to in-store discounts to move that and some of its other brands. Now they expect multiple bidders?

There are only three other companies that could really be interested: Constellation (US), Diageo (UK), and Allied Domecq (UK). Constellation is unlikely to make a bid. Having already bought BRL Hardy–when the US dollar was much stronger–they already have good exposure to Australia. Further, they just gobbled up Robert Mondavi for $1.36 billion. Better to digest that one first.

Diageo could pay above the Foster’s bid. Formed by the merger of Grand Metropolitan and Guinness, the transaction size would not be big for this maker and distributor of wine, beer, and spirits with nearly $20 billion in annual sales. But given their global reach, would they want to hunt the wounded beast that is Southcorp? Certainly they did trump other bidders in their acquisition of Chalone last month.

Allied Domecq is probably the most likely rival to Foster’s. Their diverse holdings include Maker’s Mark bourbon as well as Dunkin’ Donuts and Baskin Robbins. So with wine in growth mode, if management wanted to add more wine to their portfolio, this is a big opportunity for them to do so. The currency is not such a negative factor as it would be for say Constellation since Allied Domecq is a UK company.

But many investment analysts say that Foster’s bid is a “mistake” and shares of Foster’s have traded down 10% on the news. Citigroup analyst Dawn Oldham in Melbourne values Southcorp at $2.90 a share. Further, a Foster’s acquisition would cannibalize sales of Foster’s existing Australian brands she says.

So the white knight that Southcorp’s chairman Brian Finn and the markets are anticipating may not arrive. The other big players may bet that Foster’s will drown in its own Shiraz.

Two days after acquiring a 19% stake in Southcorp, Foster’s has now made a bid for the whole company offering A$4.17 a share for the whole company, valuing it at A$3.1 billion ($2.35 billion). But Southcorp rejected the bid calling it “inadequate and opportunistic.”

Shares of Southcorp surged 11 percent in anticipation of a rival bid, most likely from Diageo or Constellation, both of whom made acquisitions just last month.

More globalization in the glass.