James
Halliday
Notes of presentation to Pinot Noir 2004
Global Issues of Pinot Noir
31 January 2004
*
"I am going to start with a couple of quotes:
“Much red Burgundy remains of very insultingly
low quality – raw, thin and inarticulate. It
was admittedly worse in the past but this is still
a wine that relies more on a wine dream to sell an
often unlovely reality.” *“Time
and time again I have embarked on a Burgundy tasting
looking for minute differences between sites and found
only stark difference between growers’ winemaking
abilities. Why not confine one’s search to the
different wines of one talented grower? Differences
between adjacent vineyards emerge in one vintage and
another vintage can reverse them. *"Of
all the world’s great wine regions, Burgundy
is widely seen as one of the most difficult to understand.
This reflects the impression that it’s unpredictable.
There is no certainty that a bottle of a given appellation
will taste like any other and all too frequently price
seems to bear no discernable relationship to quality. *“Even
seasoned wine lovers faced with a range of Burgundies
on a shop shelf or a restaurant wine list might turn
towards more predictable decisions rather than risk
an expensive disappointment.
The first two quotes come from Andrew Jefford’s
book ‘The New France’ and the next two
from Remington Norman’s ‘The Great Domains
of Burgundy’. *
They add dimension to the sackcloth and ashes of the
Joseph and Reedman school of thought which made me
feel thoroughly depressed. I thought enough of all
this predictions of gloom. Let’s just take a
step back. *
I was part of the group that in 1995 put together
a 30-year vision for the Australian wine industry
taking it through to 2025. That was presented at Wine
Australia in 1996. *
When it was unrolled, behind the mission statement
was a couple of key figures - A$2.5 billion of wine
exports and A$2 billion of wine sold in the domestic
market by the year 2025. *
In 1996 the deficiencies both in terms of quality
and quantity of the 1995 vintage were apparent and
we were lectured severely by the investment community
because we had been foolish enough to come out with
a vision that was ridiculous in the first place and
now absolutely absurd. *
We were told not to do it again. Of course, the calendar
year to the end of December has seen Australian exports
hit the 2025 A$2.4 billion mark. About four years
ago, we knew 2025 was hopelessly out of date and revised
it to the year 2010. *Those
recast figures have already been superseded and there
is a widespread school of thought that says by 2010
Australia’s wine export value will exceed the
value of any other agricultural commodity from Australia.
§ Also in the course of that, we looked at both
producing and importing countries and an inter-country
comparison. One of the things we said to ourselves
was that the rate of growth into the UK could not
be sustained. We had to assume back then that those
exports would level out and we would need to find
new markets. That didn’t happen either. *
In 1979/1980 the old world traditional Europe had
96% of the world wine exports by value. About a year
ago, which is the most recent figure I’ve got
from Centre of International Economic Studies in Adelaide,
that figure had fallen to 79%. And was falling fast. *
If you take out intra-EU sales and say they’re
in a common market, Australia has 29% of the world
export market second only to France. *All
of this makes me think that the absence of a recognition
of Pinot Noir in the UK market is not a constraining
weakness, but a most marvellous opportunity. You have
got a new world that is progressively taking market
share from the old and you have this massive gap to
drive into. *
It is said Robert Mondavi used to get up every morning
and kneel by his bed and say thank God for Gallo.
I would suggest to the smaller Pinot Noir makers you
should get up each morning and say thank God for Montana.
You are going to need some big players out of the
new world who are able to deliver Pinot Noir of the
quality of a quality, volume and price that will attract
the punters. *
That would be the base of the pyramid or the aircraft
carrier with the little boats following on behind.
*This
coming vintage Montana is going to produce 2000 tonnes
of Pinot Noir for red wine and much more for sparkling,
producing 135,000 cases – giving you a significant
volumised producer of Pinot Noir in NZ. *
We keep on coming back to the proposition that Burgundy
is over-priced and disappointing. Therefore you have
got to break free of the shackles of the impression
that Burgundy has given and work the brand creation
similar to that which Australia did via Hazel Murphy
in the UK. *
Much to Australia’s annoyance, NZ has the highest
average retail price of any country on UK wine shelves.
That does not seem to me be an embarrassment but cause
for celebration because it tells you your wines are
in fact better than those of your competitors in the
eye of the consumer. *
It would seem to me that going into traditional markets
with generic and multi-branded promotions and just
hammering away on the Pinot Noir message is the way
to go. *
Of course this raises the question about is there
too much Pinot Noir being produced? Well NZ has about
3360 hectares. Australia has 4140 hectares. *
The world planting of Pinot Noir in comparison is
205,000 hectares and you can compare that with 568,000
hectares for Cabernet and 546,000 for Merlot. *
I don’t believe for one second that there are
significant marketing problems which with the appropriate
solutions will stand in way of Pinot Noir from Australasia
and the new world. *
By 2014 the sleeping tiger of Asia will have started
to leap. We don’t know how quickly distribution
infrastructure, which is currently one of the main
problems within Asia outside of Singapore, Hong Kong,
Taiwan and Malaysia, will be in place and we can start
looking at Mainland China and a rapidly liberalising
India. *I
really don’t have any doubt that by 2025, which
is the end point of our 30-year vision in Australia,
that Greater Asia will be our largest wine market
and the long-term downward trend in wine consumption
will have been reversed by that market. *
In the meantime for all the sackcloth and ashes, Brits
will keep drinking more and more table wine. *In
the interim before the tiger gets out of its lair
obviously UK and then more importantly for Australia
but I would suggest also for NZ, North America has
an enormous appetite for wine – it is in no
way, shape or form a mature market. *Yes
it does require certain strategies to get around the
aftermath of prohibition with the three-tiered structure
and the separation of one state from the next which
actually gives I think once again an advantage because
it stops the Tesco's of this world vandalising and
tearing to shreds people who are trying to produce
very good wine at a very fair price. *
Within that market as a whole I think Pinot Noir is
the jewel in the crown. *In
my experience you can do all of the climatic studies
you like and soil analysis you like and you’re
still not going to know until you’ve got Pinot
Noir in the ground and producing whether you chosen
the right spot or not. It has tricks up its sleeve
that no other variety has. *So
be brave, be happy and go for it.
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