There has been a lot of love for regional wine on the blog this week, as the Wine Curmudgeon does his bit to support DrinkLocalWine.com's regional wine week. And rightly so -- regional wine is a legitimate part of the wine world, and it deserves recognition.
But that doesn't mean there isn't room for improvement. There's a reason, even though the number of U.S. regional wineries has increased 10-fold since 1975, that California still produces 90 percent of all U.S. wine. Some of the problems, like distribution laws that favor large, national wineries, are out of the regional wine business' control. But there are other areas where regional wineries can help themselves. After the jump, a few thoughts about how regional wine can get better.
In fact, the average California winery produces about 82,000 cases of wine a year, compared to about 7,000 cases for the typical regional winery (based on California and world production figures from the Wine Institute and my math).
This disparity in numbers helps explain another serious problem facing regional wine. Too often, local wines are more expensive than similar California or European wines, and sometimes by as much as 20 or 30 percent. Much of that comes from economies of scale. The costs of production are proportionately less expensive for larger wineries, so that a company like E&J Gallo is going to pay a lot less for bottles than the 1,500-case winery down the road.
Economies of scale also apply to the cost of money. It's more expensive for a regional winery to borrow money than it is for its national counterparts, and that expense plays a bigger role than most people realize. A startup winery has to buy equipment, a building, and land, plus pay salaries. It usually does that with borrowed money, and has to factor the cost of borrowing into its prices (bankers are fussy that way). Hence higher prices than a larger, more established winery that can finance equipment and the like internally or with better rates from lenders, or an under-capitalized business, which is probably worse.
Regional wineries must do a better job of marketing themselves to overcome this price gap. Many of us are willing to pay a premium for a local product, but large parts of the regional wine business have been slow to understand this and use it to their advantage. They either don't see local as an advantage, or they feel that they're entitled to our money because they are local and shouldn't have to do anything else. Wine is just as local as tomatoes or cheese, and regional wineries must beat this drum as loudly as they can.
The other obstacle, of course, is quality. It has improved dramatically over the past decade, and the best regional wineries compare favorably with their counterparts in California, Europe, and Australia. I've had wine from places like Indiana and Maryland that were revelations.
Yet there is still a long way to go. Too much local wine, to paraphrase John Mortimer, is Chateau Tasting Room -- poorly made and sweetened to cover up its flaws. Their excuse is that consumers like sweet wine, but that's a justification and not a business model. Regional wine's core demographic may well like sweet wine, but that should not be an excuse to make bad sweet wine. And, as I always point out, the best-selling wines in the U.S. are cabernet sauvignon and chardonnay, neither of which is remotely sweet.
Ah, but the regional apologists say, those aren't our customers. Which is the final hurdle regional wine must overcome. Those people are their customers, because local wine doesn't exist in a vacuum, serving only the couple of thousand people who visit the winery. They are part of the local wine movement in their state, which is part of the regional wine movement in the U.S. Their competition is not the winery down the street, but every winery in the world. Every person who comes into their building and grimaces at what they taste hurts not just their winery, but every regional wine everywhere. That's because they go home and say, "Boy, Texas (or Virginia or North Carolina or whatever) makes crummy wine. Pass the Yellow Tail."
That approach won't help regional wine get better. And that should be the goal. In 1975, there were 32 wineries total in Washington state and Oregon -- the same number as in Ohio. Today, each state has become a top-flight wine region, and their products are known throughout the world. Think of that the next time someone knocks regional wine.
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