Monday, June 28, 2021

It's about time we started producing online wine maps

I think visually. I say this because it is clear to me that many people do not do so. Mathematicians are the worst — if I can't get a picture of what an equation is saying, then it is gibberish to me, although apparently not to a mathematician. Mind you, if I can get a picture, then I can usually explain it to all of the other people who also think that it is gibberish. That is why this blog is full of graphs — they are pictures of numbers and equations, and this makes much more sense to me, personally.

Dispersal of wine-making from Georgia

A picture of geography is a map; and so maps are also of interest to me. This means that one possible picture for "wine" is a map — that is, a picture of where the wine comes from. Georgia (the country) does not mean much to me personally, because I have never been there, even though it is credited as being the cradle of wine-making (8,000 years ago).  However, I do have a picture of it, because I have seen a map (as shown above).

Other people have also had this same idea, of course; and there have therefore been a number of books produced with map-pictures of the wine world. Indeed, I have several of them, including:
  • The World Atlas of Wine, by Hugh Johnson (1st edition 1971; I have the 3rd edition 1985)
  • Oz Clarke's World Atlas of Wine (1995; I even have the Swedish translation, as well)
  • Journey Through Wine: an Atlas, by Adrien Grant Smith Bianchi and Jules Gaubert-Turpin (2017; this adds the time dimension to the two spatial ones).

In the modern world, however, a book is actually pretty limited in this regard. Computers, on the other hand, are perfect for maps, because you can interactively zoom in to all sorts of scales of detail, which you cannot realistically do in a book. You can also keep the data up-to-date, and add as much new data as you like. These are all valuable features.

So, why are there so few computer maps of the wine world? Obviously, the data do exist; and where there is a will there is a way. The people at the Austrian Wine Marketing Board (aka Austrian Wine) have taken this on board, and have produced the first online map of the wines of an entire country.

They started this project back in 2018, with "the goal to digitally record and present all origins of wine in Austria in a uniform manner". They have just (June 2021) released their first public version of the map, at: Austrian Vineyards.

The wine-location map is from official data, "based on statutory decrees and decisions issued by the National Wine Board", with vineyard boundaries defined by the Federal Office for Metrology and Surveying. The finest map details refer to each individual vineyard site (called a Ried).

I love it, particularly because of its pioneering spirit. So, let's look at the good news and the bad news.

Vineyard map of Austria

The obvious good news is that the map exists; and hopefully it will act as an inspiration and role model for all of the wine groups in other places.

The maps are commendably clear. The upper levels of the map are part of a labeled terrain image, showing all of the hills and valleys (see above). The topography gets obscured by the label details as you zoom in, of course. The final few layers after zooming are (unlabeled) satellite photos; and at the most detailed level you can see individual rows of vines.

Each map is a set of tiles. Map zooming is in discrete steps; and unfortunately it is currently slow to re-draw each new set of tiles. However, the satellite images are re-drawn much more quickly.

The maps have two colors, but without a legend. These are, however, explained under the FAQ menu item: "The dark pink areas show the vineyards currently under vine in Austria; light pink represents parts of a Ried not under vine."

The Information menu (at the top of the page) does appear to work properly. However, choosing things from the Wine-growing Regions menu does not appear to do anything on my computer; so all access to map descriptions is via clicking on the map — labels can be clicked to open a descriptive panel.

This panel contains the following information about each site:
  • Winegrowing cadastral municipality
  • Winegrowing municipality
  • Large collective vineyard site
  • Specific winegrowing region / DAC
  • Generic winegrowing region
  • Winegrowing area
  • Winegrowing country
We are also told about temperature, precipitation, and sunshine hours for each vineyard — the difference between high and low-altitude vineyards may be significant, for example. More importantly, they could be used to track the increasing drought patterns of recent years (see Terroir trocken).

We are all familiar with the German-language way of presenting information — you get all of the details all of the time. So, German-language wine labels suffer from a surfeit of detail, in which the information we want lies buried, somewhere. That is, in a hierarchy of classificatory information about a wine, the whole lot needs to be given, every time, which makes classifications and wine labels unreadable by most of us.

So, this new map actually helps us understand how all of the information fits together. Hallelujah! Finally! In this case, there is even a picture (a pyramid) of the 9-level hierarchical classification of Austrian wines and growing sites.

Equally fortunately, we are told that: "in many wine-growing regions in Austria, we see a growing trend towards clear profiling in just three categories" — regional wine, village wine, and single-vineyard wine. This is, indeed, good news for those of us who wish to understand Austrian wines (three levels is much better than nine). The Germans have just introduced a new four-level classification of their own wines, based on place of origin not sugar level; but not everyone is convinced.

The main information missing missing from the map is about how to pronounce all of these Austrian wine-related names without sounding too ignorant, or being reduced to putting on a fake Germanic accent.

For the future, the map notes: "Supplementing with information on the grape varieties or on the winegrowers from each region of origin is something that is planned for the next update (expected to happen in 2022)." These will be valuable additions to the map; and will set the standard for those wine regions that follow in the wake of the Austrians.

If nothing else, this map might encourage you to check out for yourself what Megan Krigbaum calls: "The gracious, arms-wide-open and passionate hospitality of the Austrian winemakers, coupled with the serene beauty of the countryside".

Monday, June 21, 2021

Is wine for drinking or investing?

In essence, wine is nothing more than flavored alcohol, made from some sort of berry, often grapes. As such, it has various uses, including drinking. The objective of drinking it is not something that I will go into here, but there is a large literature on the subject.

An alternative use involves storing it, so that one can talk about owning it. This sometimes leads to selling it for a profit at some future time, rather than consuming it oneself. This seems to me to be a waste of the wine; but to some other people this is a form of financial investment, just like buying stocks, shares or cryptocurrencies, or apartment buildings and farms for that matter, or even just sticking cash in the bank for a while.

Porfolio diversification

This is apparently called "diversifying your investment portfolio", in which you try to invest your hard-earned cash in places that have a low correlation of financial performance with each other. That is, even if you go bust on Bitcoin, you might make a killing on Tesla. Surely this is called gambling? You might as well just become a poker pro in Vegas! Anyway, there are Fine Wine Markets for helping you invest in wines, such as Liv-Ex; and these days even apps for the same purpose (eg. Vinovest). There is also, of course, some media advice, should you need it (eg. Which California cult wine is the best investment?).

Of relevance here is an article that appeared last year: Parker’s ‘Magical 20’ in 2020. Back in 2011, the infamous Robert M. Parker, Jr, touted 20 Bordeaux wines from the 2009 vintage that he considered to be “under-valued and very smart acquisitions”. I suspect that he was actually thinking of drinking the wines in the future, not selling them. Nonetheless, Liv-Ex did some checking in their marketplace last year, and came to the conclusion that: “Of the twenty wines tasted by Parker, seventeen have risen in value (from as little as 5% to over 170%)”, with an average of more than 40% increase in dollar value over the 9 years. This increase has been interpreted as a smart financial investment (Robert Parker’s ‘Magical 20’ thriving in 2020).

However, we should step back a bit, and have a think, before we rush to invest in wines, for any purpose other than imbibing. There are a number of differences from buying, say, stocks and shares; and even the parts that are the same can have different costs associated with them. Costs, of course, reduce your "gross" profit into a more realistic "net" profit (or loss).

One obvious cost is inflation. If your increase in value does not exceed inflation over the same period of time, then there is no net profit. According to the US Inflation Calculator, inflation from 2011 to 2020 was 15%. So, any suitable wine appreciation must be at least that large, to count as a successful investment. This removes several of Parker's wines from contention as investments.

In all investments, there is also the matter of a capital gains tax on any net profit, which may be the biggest bite taken from any investment income. Taxation authorities take a dim view of any attempt to evade paying these taxes, even if the gains are ill-gotten. (Note: the tax people were the ones who got Alphonse Capone, for not paying his taxes, rather than anyone getting him for his host of other illegal activities.)

We also need to take into account the special out-of-pocket costs associated with wine storage, which differ quite dramatically from most other investment strategies. After all, renting out an apartment brings in yearly income while you wait for an increase in resale value. Wine, on the other hand, just sits there in some sort of temperature- and humidity-controlled wine locker; and probably an expensive commercial one, if you are going to convince the buyer of the wine's provenance — these are of the order of $US1 per bottle per year. The initial purchase price of the wine is just part of the final cost.

Then there is the matter of the seller's commission you need to pay for a middleman, like a wine auction house or some sort of broker, to find a buyer who is willing to pay an acceptable price for your wine. The same is true for other property investments, of course; and there is a fee for selling stocks and shares. However, the actual costs can differ notably among them. Wine auction houses tend to take 10–20% commission, while individual brokers performing introductions between sellers and buyers might get a 1–2% fee.

Current year return on investment in the USA

In addition to these points, we could also make a comparison with the gross increase in value of other investment types (ie. we compare the so-called opportunity costs). There are too many of these to list, of course — this year, oil is looking pretty good but government bonds are not, as the above graph shows. However, even within these types there can be big differences in financial returns. For example, how much money would you have made if you had invested in Apple, Amazon, Netflix or Tesla back in 2011, compared to investing in shares of any other companies? In the same week as the Liv-Ex article about Parker's wines, we had these headlines about the stock market: These stocks have rallied more than 400% this year ; Stocks finish second straight quarter of big gains.

What about investing in Bitcoin? Now there's a roller-coaster ride in price changes since 2011 (Bitcoin price today & history chart). Wine investment is mild by comparison; and you can't drink Bitcoin, while you can “drink your losses” in the wine world! Mind you, Bitcoins do not appear to have a Best-Before date, but your investment wines most certainly do.

Bitcoin prices, 2010-2021

One final point here is the ethics of what you invest it. William and Melinda Gates have recently been in the news, as the public has now realized that they own rather a lot of the geographical USA (The controversy over Bill Gates becoming the largest private farmland owner in the US). There is the possibility of a disconnection between the management of these farms and Bill Gates' public statements about climate change. You see, he is an absentee landlord, and does not actually run any of his farms. So, how does he know whether these farms are being run sustainably? If they are not, then his climate-change advocacy counts for little. You might like to think about this idea, with regards to yourself, the next time you decide to invest in some fine wines, for profit.

Much thanks to Bob Henry for help with this post.

Monday, June 14, 2021

Australia and New Zealand wine comparisons

A couple of weeks ago I compared Australia versus New Zealand wine exports. One of the confounding factors in that comparison is, of course, the size of the two different countries. Indeed, Australia is officially a continent, as well as a country and an island, being roughly the same size as the contiguous USA, whereas New Zealand is basically a couple of smaller islands.

One obvious way to address this issue of difference in geographical scale is to compare wine-industry measurements per capita (ie. per person), which is my objective in this post.

Indeed, if we wish to look at exports, for example, then per capita wine production in each country, along with per capita wine consumption, would tell us about the actual situation regarding those exports — any difference between these figures must translate into either a need for imports or for exports, as the case may be.

As usual, the data come from the Annual Database of Global Wine Markets 1835 to 2018 (by Kym Anderson and Vicente Pinilla), tables T8 and T38, with a bit of extra data from NationMaster and Statista.

The first graph shows the per capita wine production (vertically) through time (horizontally), for both Australia (blue line) and New Zealand (pink line). Obviously, in both cases their population has grown over the years, but wine production has out-stripped that growth. Australia reached its peak wine-production level at the start of this century, and has remained there ever since. New Zealand reached that same level about 10 years later.

Per capita wine production in Australia and NZ

So, in one sense, the wine production of both countries is remarkably similar these days (although very different in total volume).

The next graph shows the per capita wine consumption over the same period of time. Once again, the two countries have arrived at a remarkably similar point over the past 15 years. However, Australia remained ahead before then, but not by much, really. There was, for some reason, a spike in Australian wine drinking during the 1980s (but not in New Zealand). Oddly, this is when I first became interested in wine, although I emphasize that I am in no way personally responsible for the peak — instead, this was when Australians first started to realize the high quality of most of their bottled wines, a mass of cheap bulk wine notwithstanding.

Per capita wine consumption in Australia and NZ

So, it seems that the all too obvious rivalry between these two countries has resulted in convergence to a common social situation. It is not just the spoken accents that indicate a connection between the two locations! [They are also often partners vinously; eg. Wine tourism; Trans-Tasman project aims to stop viral pathogens in their tracks.]

This leads us to the final point, about wine imports versus exports. The final graph shows the calculation of per person production minus consumption through time — the area above the horizontal dashed line indicates excess production available for export, while below the line indicates a need for imports.

As you can see, Australia has always produced more wine than it has consumed, although it was a close-run thing until the 1920s. In the 1980s, when consumption had a spike (as noted above), consumption was also close to production.

Excess of wine production over consumption in Aus and NZ

New Zealand, on the other hand, has only had an obvious excess of wine production over consumption since early this century. Until 1970, production was slightly less than consumption, followed by 30 years where things varied quite a lot from year to year. However, things have consolidated since then into a consistent export market, matching or exceeding the Australian situation.

As I noted in my previous post, the wine exported is very different between these two countries. Indeed, in the USA, sales of the infamous Yellow Tail seem to be almost as large, by volume, as all New Zealand wine put together. This has not done Australia any good, in terms of the image of its wines, in spite of the diversity actually available (see Why Australia’s latest wines are making waves ; We shouldn’t be talking about Australian Cabernet anymore). On the other hand, being perceived as a land of Sauvignon blanc has not done the New Zealanders any good, either (Is Marlborough really the Sauvignon blanc capital of the world?) — market demand seems to have created this perception, not the actual range of wine types actually available in NZ. (Note that the Yellow Tail comment above is an exaggeration, as New Zealand wine imports to the USA have exceeded those from Australia for the past 5 years.)

So, high-tail it down to your local liquor store / bottle shop / off license, and check out the diversity of what is on offer from these two countries. You will not regret it, either in terms of quality or value — there are warm climates and cool climates in both countries, to match any vinous taste that you may have (ie. it is more than just Shiraz and Sauvignon blanc). Much of the beer is not too bad, either.

Monday, June 7, 2021

Wines from Chile are great value-for-money

It seems to me that there is no better value for money to be had in the wine world than the vinous products from Chile, overall. Compared to most other wine-producing areas, the quality is uniformly high, and the same quality of wine seems to cost quite a few pennies more elsewhere. Thus is a good situation for the wine consumer who likes Chilean wine.

I am not the only person to have suggested this, of course. Recently, James Suckling has produced his 2021 reports on Chilean wines (A different Chile: greatness beckons, but is it a leap too far? ; A different Chile, Part 2: Embracing a shifting winescape); and so we could have a look at his scores for some evidence of uniformly high quality.

There were apparently 1,065 wines tasted and rated for these reports by James and the other tasters at This is a pretty good sample size, and definitely worth a look, as shown in the first graph. Here, the vertical axis counts the number of wines with each of the scores, as shown horizontally. James' comment on the situation is:
After finishing our ratings of 1,065 bottles of Chilean wines in Hong Kong, one thing is clear: the Andean country is churning out bottles of excellent quality and remarkable value, and these characteristics were cemented by fantastic 2018 and 2019 vintages.

Chilean wine scores for 2021

As you can see, the scores are centered on a score of 91, with a very symmetrical distribution about the central value. Mathematically, this shows random variation around some central value of quality. This is actually a quite unusual situation, since it implies that the Chilean wine-makers are, as a group, going for the same level of quality, which they each achieve, more or less.

Notably, 7/10 of the scores are in the range 90–92, which is extremely consistent. In addition, 6/7 of the scores are 90 or more, which is a pretty good batting average. However, nothing scored 100, and only one wine scored 99 (Viñedo Chadwick Cabernet sauvignon 2019, from Valle de Maipo). On the other hand, only two wines scored <84.

We can compare these results with previous years, of course. James notes that scores of 90 or more have increased over the past few years: 2021: 86% of the wines; 2020: 83%; 2019: 73%; 2018: 74%. Another good comparison is with James Suckling's Top 100 wines of Chile 2020, as shown in the next graph.

Top Chilean wine scores 2020

These data look remarkably similar to the first graph, which suggests consistency from year to year. In this case, nothing scores 99, but there are three scores of 100: Viña Don Melchor Cabernet sauvignon 2018 (Puente Alto) Clos Apalta 2017 (Valle de Apalta), and Seña 2018 (Valle de Aconcagua).

On a slightly different note, James concludes his reports by noting:
Although there was conspicuous improvement in our tastings this year, there is still a good way to go from excellence to greatness. This may be a surprising conclusion given the high expectations for Chilean wines — after all, even mass-production bottles from the country show higher - than - reasonable quality. 
But with the growing acclaim for the country’s wines, the pressure is now on the wineries to step up their games. Instead of sitting in their comfort zones and regularly producing wines in the range of 90 to 92 points — the benchmark for high-quality Chilean wine — the producers need to make the extra effort to close the gap.
This is all very well for the wine consumer, provided that the resulting price does not go up too much! A comfort zone of >90 points is no bad thing — if it ain't broke, don't fix it.