In Anticipation of Cruising the Rhone River

By Robert Haas

"Cruising" a river seems like an odd term.  One usually cruises on an ocean.  But two old northern Rhône wines with our roast pork loin last night reminded me of the pleasures of the Rhône River.

I have visited the Rhône River Valley over a hundred times since 1954 and have viewed the river from both banks but have never seen the banks from the river.  Nor have I stopped at the little ports along the way.  This will change next summer, when Barbara and I will join Neil and Marci Collins to lead the Tablas Creek Rhone River Cruise.  It will be a new experience, and one I am really looking forward to.  I have always loved the old town of Avignon and its crenellated walls, where the cruise will begin.  And, of course, the ruins of the famous old pont d'Avignon, where on y danse tout en rond.  It will be fun to see these things from comfortable quarters on a boat.

Along the southern Rhone, our itinerary will then take us to Arles -- one-time home of Van Gogh and the location of some of the best-preserved Roman buildings outside of Italy – and Tarascon, with its imposing medieval castle.

We will also, of course, be making a pilgrimage to Château de Beaucastel, our partners in Tablas Creek, and friends and colleagues for 45 years.  This visit will include a special tour of the property and a classic  southern Rhône lunch in their gardens prepared by Beaucastel's Michelin-starred chef Laurent Deconick.

Next we’ll head north, to Tain L’Hermitage, a landmark destination for lovers of the northern Rhone’s signature Syrah, Roussanne and Marsanne grapes. I have spent many days over the years visiting the historic cellars of famed northern Rhône appellations such as Hermitage, St. Joseph, Cornas, Condrieu, Château Grillet, and Côte Rotie.  No less a wine lover than Thomas Jefferson said in 1791 “Hermitage is the first wine in the world, without a single exception”.

Further north we'll continue to Lyon, a center of French gastronomy with the architecturally famous Place Bellecour, for a few days.  While there we’ll make an excursion to Chalon-sur-Saone on the Côte Chalonaise, the southernmost Burgundy appellation, and on to Beaune, a center of the Burgundy wine trade.  I have visited the Beaune area regularly since 1954 and see the old streets very little changed.  A major attraction, as well as the surrounding vineyards of Beaune, is the old Hospices de Beaune, originally a charity hospital founded by of the Dukes of Burgundy in the 15th century.  A tour there includes the remarkable architecture and a view of the famous Beaune Alterpiece, a triptychpainted in the 17th century by Rogier van der Weyden.

The culinary pleasures of the Rhône Valley are legendary, with Mediterranean influences from Provence in the south and the classic French cuisine of Lyon in the north: olives, fruits, nougats de Montélimar, quenelles, andouillettes, saucissons de Lyon, and the Lyon original, onion soup.  I can never get enough of those.

And the wines of the Rhone, from Châteauneuf-du-Pape, Cotes du Rhone, and Tavel in the south to Condrieu, Côte Roti, Hermitage, Cornas, and St. Joseph in the north, can be exceptional.  On the cruise ship, we will be dining together as a group most nights, with wines selected from the Rhone, and a few from Tablas Creek, of course.

Back to last night’s roast, which was flavored with rosemary and juniper, hallmarks of Rhône Valley seasonings.  The wines, both red and white, had aged well and complemented the food.  The Hermitage white, a blend of mostly Marsanne and some Roussanne, was nutty and deeply flavored, minerally and honeyed, and attested to the rewards for aging Rhone whites.  The St. Joseph red, all Syrah, was savory and deep, with flavors of coffee, roasted meat and syrah’s signature white pepper.  Both were wonderful.

Barbara and I are very much looking forward to joining Neil and Marcy and sharing our experience with our fellow cruise guests next August.  We hope that many of our friends will gather with us for the fun.

Tasting the wines in the fall 2014 VINsider Club shipment

Every six months, we send out a six-bottle shipment of wines to the members of our VINsider Wine Club.  The fall shipment is the showcase for our signature wines, and is highlighted by the newest vintages of our Esprit and Esprit Blanc.  That's no different this year.  But this is the first shipment we've sent out entirely made up of wines from the classic, generous 2012 and 2013 vintages.  And if my pre-tasting of these wines is any indication, everyone is in for a treat.

The 2012 Esprit de Tablas and 2012 Esprit de Tablas Blanc are joined in this shipment by two varietal wines: the 2013 Vermentino, particularly bright and crisp this year, and the 2012 Grenache, with its classic freshness and high-toned, spicy fruit.  Finally, we included the remarkable 2012 En Gobelet made entirely from head-trained, dry-farmed vineyard blocks of Grenache, Mourvedre, Syrah, Counoise and Tannat. Note that there are only five different wines because club members get two bottles of the 2012 Esprit de Tablas.

I opened the shipment's wines today to draft the tasting and production notes that will be included in the shipment, which will leave the winery the week of September 22nd. Readers of the blog, as usual, get a preview.

2013 VERMENTINO

• Production Notes: Our twelfth bottling of this traditional Mediterranean varietal, known principally in Sardinia, Corsica, and Northern Italy. It is also grown in the Mediterranean parts of France (particularly Côtes de Provence) where it is known as Rolle. The Vermentino grape produces wines that are bright, clean, and crisp, with distinctive citrus character and refreshing acidity. To emphasize this freshness, we ferment and age Vermentino in stainless steel, and bottle it in screwcap.
• Tasting Notes: a zesty, citrusy nose that also includes the fresh green herbs and pronounced minerality characteristic of Vermentino. In the mouth, an initial impression of richness quickly turns crisp, with great acids, just a hint of tropical fruit, and a long, bright, meyer lemon/key lime finish. Classic Vermentino. Drink now and for the next 2-3 years.
• Production: 900 cases
• List Price: $27 VINsider Price: $21.60

2012 ESPRIT DE TABLAS BLANC

• Production Notes: 2012 provided a warm contrast to the cold vintages of 2010-2011, giving Roussanne generous fruit to go with its spice, structure and flavors of honey and pear skin.  This unusual friendliness allowed us to use more Roussanne than usual in our Esprit Blanc, adding just enough Grenache Blanc and Picpoul Blanc to lift the aromatics and the acidity slightly, and bring in a hint of sweet spice.  We blended 75% Roussanne (fermented primarily in foudre) with 20% Grenache Blanc and 5% Picpoul, then for the first time let the blend age in foudre through the next harvest before bottling it in December and aging it an additional 10 months in bottle before release.
• Tasting Notes: An inviting nose of preserved lemon, panna cotta, green pear, buttered toast, anise and wet rocks. The mouth is rich but dry, with flavors of butterscotch, apple pie, marmalade, candied pineapple and ginger, and gentle acids keeping things clean. The long finish is luscious and spicy with lingering flavors of peach pit, gingersnap and mineral. Absolutely delicious now, so don't feel bad about opening one soon. But it you want to age it, we expect it to go out 15 years or more and to gain nuttiness and complexity with time.
• Production: 2465 cases
• List Price: $45 VINsider Price: $36

2012 GRENACHE

• Production Notes: 2012's generous crop levels and warm temperatures combined to produce Grenache that tends toward red fruit and sweet spices, but the unusually large diurnal temperature shifts also provided long hangtime, gradual ripening and good acidity.  Harvested between late September and late October, Grenache lots were fermented in upright wooden and closed stainless steel fermenters, then moved to neutral barrels. The lots were selected and blended in May 2013, aged a year in a mix of foudre and stainless steel, and bottled in May 2014.
• Tasting notes: A clear garnet color, with a clean, minty, lifted nose of mineral and wild strawberries. In the mouth it shows both richness and freshness, with flavors of cherry and red licorice, crushed rock, and sweet spice. Vibrant acids and Grenache's classic front-palate tannins keep the long finish fresh, with lingering flavors of cherry pit and cocoa powder. Drink now or for the next fifteen years.
• Production: 1050 cases
• List Price: $40 VINsider Price: $32

2012 EN GOBELET

• Production Notes: Our fifth En Gobelet, a non-traditional blend all from head-trained, dry-farmed blocks, and mostly from the 12-acre block we call Scruffy Hill and planted in 2005 and 2006 to be a self-sufficient field blend.  In this warm, dry year, our head-trained Grenache thrived, and in fact produced more fruit than the rest of the acreage combined, producing a blend of 63% Grenache, 12% Mourvedre, 11% Syrah, 8% Counoise and 6% Tannat.  We co-fermented the components from Scruffy Hill, then blended in head-trained Tannat from near our tractor barn for its dark color, smoky, spicy flavors and firm tannins. It was aged in foudre and bottled in July 2014.
• Tasting Notes: An exuberantly appealing nose: minty, meaty and spicy, with strawberry and red currant, tobacco and sweet spice. In the mouth it is rich, tangy and mouth-filling, darker than the nose suggests, with chewy tannins, chocolate and grape flavors, and good grip. The finish is exceptionally long, with chalky minerality and dark red fruit. Delicious now, but with the stuffing and balance to age. Drink now and for the next two decades.
• Production: 950 cases
• List Price: $45 VINsider Price: $36

2012 ESPRIT DE TABLAS

• Production Notes: Like all the 2012 reds, the Esprit de Tablas shows the results of the vintage's classic combination of healthy yields, warm temperatures, high diurnal variation, and beautiful weather at harvest.  The generous fruit character of the Mourvedre and Grenache resulted in us using more of the dark, smoky, savory Syrah grape than we have in years, to bring structure and seriousness to the resulting blend. Still, Esprit is as usual led by the red fruit, earth and mocha of 40% Mourvèdre, with additions of 30% Syrah, 21% Grenache and 9% Counoise. The wine's components were fermented separately, then selected for the Esprit, blended and aged a year in foudre before being bottled in July 2014.
• Tasting Notes: The nose is winey and serious, with aromas of blackberry, mint chocolate, aged balsamic, Worcestershire and red licorice. The palate is long and complex, with flavors of black raspberry, plum compote and leather, and Mourvedre's signature flavors of cassis, black tea and roasted meat. The wine's tannins come out on the long finish. We recommend that you hold the 2012 Esprit for a few months, then drink either between 2015 and 2017 or 2020-2040.
• Production: 4600 cases
• List Price: $55 VINsider Price: $44

Veraison two weeks early suggests a late-August beginning to harvest

This week, we've seen the first hints of veraison in our Syrah and our Mourvedre.  One of the most advanced Syrah clusters is below, alongside other clusters that like most of the vineyard are still totally green:

Veraison is an exciting time visually, but its implications in the work that we do, at least in the short term, are limited.  Practically speaking, it means that we no longer have to worry about powdery mildew, and so can end our sulfur, copper, and compost tea sprays.  Otherwise, we continue the work we've been doing in the vineyard, start to thin clusters to get to our desired yields, and rest up knowing that harvest is just around the corner.

Physiologically, what is happening inside each grape during the veraison process is that the grapes have stopped adding mass and begun the changes that accumulate sugar.  Like all fruit-bearing plants, its goal is to distribute its seeds far and wide, and the flavors are designed to peak at the time when their seeds are at maximum fertility.  An animal snacks on the berries, distributes the berry's seeds in its waste, and the seeds grow into new plants. 

The transformation between green, hard, sour berries and sweet, soft, red berries takes some time, and when it starts depends on that year's weather: both how early the vine sprouts and begins to grow (determined largely by the date of the last winter freeze) and how fast it can photosynthesize (determined by the amount of heat and sun after budbreak, as well as the vine's crop load).  Given this year's early budbreak and the lack of spring frost, we expected this year's veraison to be early.  The question was, how early.  It turns out that despite the drought and a relatively warm summer so far, it's taken a relatively normal amount of time between budbreak and veraison.  In degree day accumulation, 2014 has so far been one of our warmer years, though not as warm as our warmest years like 1997, 2001 and 2013 (weather data taken from the Western Weather Group's Paso Robles Wine Country Alliance forecast):

Budbreak, as I noted in a blog piece in mid-March, was about two and a half weeks earlier than normal.  We were exceptionally lucky to avoid frost given the two full months of frost risk that this early budbreak left us with.  But avoid it we did, and the vineyard has been progressing steadily ever since.  But compared to when we've first reported veraison in other years, we've actually regressed a bit toward normal.  Those dates are in the below chart, with the year linked to the blog piece I wrote that year talking about veraison:

Year	First Veraison Noted	Harvest Begins	# of Days
2007	July 20	August 28	39
2008	July 23	September 3	42
2009	July 20	September 1	43
2010	July 30	September 16	49
2011	August 5	September 20	47
2012	July 25	September 5	42
2013	July 17	August 26	40
2014	July 9	?	?

This year's budbreak is about two weeks in advance of our eight-year average.  Based on the range of days that it's taken between first veraison and harvest (between 39 and 49 days) that suggests that harvest will begin sometime between August 16th and August 27th.  Given that the years when it was closer to 50 than 40 days were in the unusually cool vintages of 2010 and 2011, I'm betting that it will be at the early end of that range.

It is interesting to me that it has taken slightly longer than average for us to go from budbreak (two and a half weeks early) to veraison (two weeks early).  This seems to me to be a good thing, given that the longer that the grapes can stay in contact with the vines, the more opportunity they have to pull character and minerality out of the soil.  This suggests to me that our crop levels aren't as low as we worried they might be three years into our drought, and provides confirmation of what we're seeing in the vineyard: that crop levels are similar to last year, and in some blocks high enough that we're starting to go through and thin out some of the clusters.

So, where does this leave us?  About where we were before.  We're still thrilled with the health of the vineyard, which looks as good as we can remember for mid-July.  And knowing that we're entering the home stretch with above-average hang time so far eases some worries that we had about the early start to harvest.

Now, the waiting starts.  But at least we know that the timer has been set.

Game Theory, the Prisoner's Dilemma and... Winery Membership Organizations, Part 2: Measuring the Value of Membership

Last month, I wrote a blog piece about how game theory, and specifically the classic example of the prisoner's dilemma, relates to participation in winery membership organizations.  If you haven't read part 1, this post will make more sense if you do so now.

OK, welcome back.

In this piece I'm going to tackle the first of two questions part 1 left unanswered: how to measure the value created by being a member of a winery organization, and whether it's worth the (often considerable) expense.  I'll tackle the second question (how game theory suggests an organization or a community respond to wineries who opt out of the communal marketing) in part 3.

Membership in a winery organization is typically not cheap.  The membership page on the Paso Robles Wine Country Alliance (PRWCA, for short) Web site lists membership prices from $675 (for wineries producing fewer than 250 cases) to $17,500 (for wineries producing over 40,000 cases) with a range of gradations in between.  In many cases, this membership is the single largest annual marketing expense for a winery member.  Is it worth it?

There are many ways to look at the benefits of membership, some of which will be applicable to some brands and not others, and some of which are more easily measurable than others.  I'll focus on a few principal tangible benefits in this piece, but want briefly to address some of the benefits of membership that I think are valuable but hard to quantify.  They include:

• Participating in the branding and market awareness of your region.  This is the central goal of most marketing organizations, and yet it is both hard to quantify the value of success and impossible to limit this value-add to members.  If a campaign is successful, each bottle of wine you produce is a little easier to sell, as there is a larger pool of people out there potentially interested in purchasing your product.  But do they discriminate between wineries who are members of the organization and those who are not?  Unlikely.  Yet most wineries and growers would list this as the single most important goal of a membership organization.
• Having representation at the many intersections of the wine community and state and local government.  Whether it's building, tasting room, or event permits; water rights; labor supply; or regulation, one role of a membership organization is to represent its members in front of local government.  Elected representatives are much more likely to hear the aggregated voice of an organization that represents hundreds of businesses and thousands of voters than they are to listen to any one individual, and it takes an organization to have the resources to attend meetings and stay informed.  A winery may go years without having a regulatory issue threaten its business, but when one does, its impact can be enormous, and having a say in the outcome invaluable.
• Being a part of a community of ideas. There is significant value in rubbing shoulders with your peers as they navigate the same challenges that you face.  You share (and borrow) ideas both directly from other members and through the educational events organized by the membership organization, and it only takes a few good ideas to make a measurable difference in your bottom line.  The PRWCA has monthly meetings for tasting room managers as well as regular seminars for growers and winemakers.  Could you replicate these by paying for the ones that you want, or by spending lots of time with your neighbors?  To a significant extent, yes.  But that process is a lot easier when you're a part of a group with the mission to facilitate this exchange.

All of the above are valuable, but I don't actually think you need to get value out of the intangibles in order to justify the cost of membership.  In fact, let's just look at one benefit: the value of the additional people that membership brings into a tasting room. 

Wineries should know what an average customer who walks through their doors is worth to them. This will vary from winery to winery and depend on the winery’s average sale (AS), the percentage of walk-in customers who sign up for a wine club (CP), the average purchase per year of a wine club member (AP), the average duration in years of a wine club membership (LM) and the winery's profit margin (PM). The calculation goes:

Average Value = (AS + (CP * AP * LM)) * PM

For us, that figure is about $130. We’re one of the larger wineries in our area, so we pay a relatively high total in dues, but even at our size, we end up ahead if membership brings at least another 125 customers per year into our tasting room. That's 11 customers per month.

Once I went to the trouble of calculating the value of each additional customer visit, the calculus of whether or not membership paid for itself got a lot simpler.  Do we get 11 extra customer per month because of our membership?  I'd say yes, many times over.  Here's how: 

Bringing customers into the area. 
The ongoing marketing and advertising campaign, the organization-sponsored events, and the media outreach that the group does are all undertaken with the goal of bringing people into the area each year.  Once the people have booked their trip, they may or may not further consult the PRWCA for guidance on where to go.  So, the visits that these customers make in the area will be distributed among the various wineries, members and not.

How many extra people does the work of a group like the PRWCA bring into the area?  It's a tricky question, as customers typically have multiple reasons that they make any particular buying or travel decision.  But I would suspect that it's at a minimum in the tens of thousands per year (the festivals alone attract over 10,000) and likely in six figures.  (For why I think it's that high, see the "But does it work?" section below.)

If we assume that each wine tourist would visit an average of 5 tasting rooms per Paso Robles trip, even the minimum figure indicates 50,000 tasting room visits created by the PRWCA's outreach.  Divide this up among 200 local tasting rooms, and you get a figure of 250 visits per year per winery.  That's already double the number that we would need to justify the membership outlay.  If, as I suspect, the visit total is significantly higher than 10,000, the extra is just gravy.

Now, does a winery need to be a member to reap these benefits?  No.  But it's not just a community-minded thing to do.  As as the prisoner's dilemma example in part 1 showed, the individual wineries in the region benefit more from pooling their resources in a combined marketing campaign than they would from spending their same money individually.  

Directing the customers that they bring (and others) into the tasting rooms of members.
There is also a direct result on traffic due to a member's inclusion on the map (below, or available in PDF here) prepared by the PRWCA, printed by the hundreds of thousands each year, and also distributed electronically to the 50,000 monthly visitors to the pasowine.com site.  That's a lot of potential customers who see you if you're a member, and don't see you if you aren't. How many of our customers have to find us through one of the PRWCA touring tools to make it worth the investment? Less than 1%.

Remember that we need 11 extra customers per month to pay for our membership.  We average 2500 visitors per month, so 11 is four tenths of one percent of our traffic. It seems impossible that being on the map and on the Web site where hundreds of thousands of customers are starting their research isn't going to bring us that tiny marginal increase in our customer base; one or two groups per week is enough.  For a smaller winery -- say one at the 3,000 case level who's paying about $3,000 in annual dues -- 24 additional customers per year does the trick.  That's one couple a month.

But does it work?
I can almost hear the reader question hovering in the background: "but how do you measure if the outreach really does drive traffic?"  I'm happy you asked.

Last year, the PRWCA started an online campaign, which ran from August through October and included targeted advertising on such high-traffic sites as Pandora, Centro, Snooth, Eater, Facebook, Twitter, Youtube and Google.  These various ad buys (coordinated by an expert digital advertising agency) produced nearly 40,000,000 impressions, and big increases in the traffic on pasowine.com and the PRWCA's various social media sites.  I'd been aware that our tasting room traffic had also spiked last fall, but hadn't particularly tied the two things together.  As a baseline for comparison, between January 2013 and July 2013 our tasting room traffic was up 2.7%.  During the August-October PRWCA ad campaign, our traffic was up 13.2%.  After the campaign ended, it was down 0.6%.  Now, this is not conclusive.  There could have been a number of other reasons that our traffic was up then (including that we had a run of good press, and that the tasting room was doing, I thought, a particularly good job).  Or it could have been a statistical blip.  But, it encouraged me to pay attention to the difference in 2014 between our traffic when the PRWCA was advertising, and when it wasn't.  So far this year, the results have been similarly suggestive. 

In 2014, the PRWCA has made two advertising pushes (around March's Vintage Paso/Zinfandel event and May's Paso Robles Wine Festival) that were separated by so little time that it seems likely that their impact would have run together.  Looking at the period before that advertising started (1/1/14-2/17/14) our traffic was down 2%.  Between the beginning of the first campaign and the end of the second (2/18/14-5/26/14) our traffic was up 8.2%.  And since the campaign ended (granted, it's only been five weeks) our traffic has been down 3%.  That's starting to be a useful number of data points.¹ 

The roughly 10% increase in our traffic that we've seen in the periods where the PRWCA has been advertising amounts to an extra 200 customers per month. That's 18 times the number of extra monthly customers we need to break even on membership.

Does a winery who is not a member get many of these benefits in traffic?  Of course.  That's the free-rider challenge.  But if they lose even a tenth of that extra traffic because they're not on the map, or not on the Web site where the customers are doing their research, they're coming out behind. 

Other Direct Benefits: Trade and Media Outreach
Of course, wineries do not live by tasting room traffic alone, and a region's or winery's reputation can be built faster with help from the trade and media.  Outreach to these groups is another function of a membership organization.  Let's look at media outreach first.  I'm always skeptical of documents that point to "ad equivalency value" of editorial pieces, but anyone who has investigated the cost of an advertising campaign knows it's staggering: placing a one-page ad in any of the big food and wine magazines is more expensive than annual membership in the PRWCA for our largest wineries.  And the value of advertising is in repetition and duration, which puts it out of reach for any but the largest wineries.  This leaves smaller wineries to work to get editorial coverage, an effort made much easier with exposure to the dozens of writers that a group like the PRWCA brings into town each year.  Is this something that every winery will get equally?  Of course not.  The writers don't write stories spoon-fed to them, and most come to town with agendas of their own.  But it only takes one success to reach an ad equivalency of equal to or greater value than the membership cost.

There are similar equations to calculate in the trade outreach that a marketing group does, in trade education, in buyers tours -- where the trade is brought to the region -- and in road shows, where the region brings itself to major markets and invites trade to see what's new.  What is the value of a by-the-glass placement at a high-profile restaurant in Indianapolis (one concrete result for Tablas Creek from last year's buyer's tour)?  Or an agreement with a new distributor to represent your wines in a market you're looking to break into?  Or a feature in the newsletter of a retailer?  These, too, are occasional but powerful additions to a winery's business.  Of course, these benefits aren't of much value if a winery is only selling out of their cellar door, but if that's the case, they probably get all the benefit they need from the additions to their tasting room traffic.  In fact, it's the added work that an organization has to do to reach the trade, and the disproportionate impact that has on larger wineries, that is the best justification in my opinion for the sliding scale of winery dues.

Both trade and media outreach are benefits that are only available to members, as non-members aren't included in visit itineraries or group events.

Conclusion
In a comment in a recent piece on the Hoot N Annie blog, Gary Eberle says that membership in the PRWCA is "the cheapest investment a winery can make in direct to consumer sales".  And I agree... whatever your size, if you have a tasting room, being a member of the organization pays for itself many times over. 

When I moved out to Paso Robles, I thought that membership in the PRWCA was something of a civic duty: an investment a winery did for the long-term growth of the area.  I still think that's true.  But I think it's equally true that membership brings direct returns to the winery many times greater than the investment.  Good for the region, and for our bottom line?  Why yes, please sign me up.

How do we get back the handful of wineries that drop out each year?  And how do we minimize the number that we lose?  Stick around for part 3.

Footnotes
¹For the stats geeks out there, I had my wife dust off her graduate statistics work and run a t-test on the changes in our weekly traffic data since the beginning of last year.  Of the 76 weekly data points, there were 30 weeks where the PRWCA's ad campaign was going on and 46 weeks where it wasn't.  With that few data points, I would have been surprised had the data come out as statistically significant. It didn't, but the p-value (the measure of significance) was .189, indicating that there was a less than 20% probability that the difference between the result sets was due to chance.