Elevating Wines to New Heights

What is there to know about Monterey County? First of all, it is in California… always a good starting point for a discussion of wine. When we drill down in the locale, we discover the beauty of Big Sur’s rugged shore; the beaches and artists in Carmel by the Sea; tide pools, and golf at Pebble Beach; and the rugged marine history of Cannery Row and Monterey Bay. Monterey County, specifically Monterey County wines, has long been a tourist destination attracting 4.6 million visitors annually, generating $2.8 billion in spending which supports 25,220 jobs. What sometimes gets overlooked in the macro-view of the County is that a combination of heat from the sun, ancient terroir and a mélange of traditional and innovative techniques used by growers and winemakers, makes the region a perfect area for producing world-class wines and the industry in Monterey County is valued at $1 billion each year. The Santa Lucia Highlands region and producers are making some of the best wines in California with more than 359 vineyards and 82 bonded wineries (an increase of 46 percent since 2012). There are more vineyards planted in Monterey than Napa (45,990), and Paso Robles (26,000 acres). Getting StartedThe Monterey wine story begins with the Franciscan friars from the Spanish mission of Soledad who planted wine grapes over 200 years ago. Sadly, these grapes died but the idea of a wine industry remained strong, and today over 40,000 acres of soil are growing grapes for wine. The re-awakening is fairly new and started in the early 1960s when Professor A.J. Winkler, a vinicultural authority from the University of California at Davis, published a report classifying grape growing districts by climate. Monterey County was designated as Region I and II, comparable with the premium regions of Napa, Sonoma, Burgundy and Bordeaux. Recognizing the enormous potential of this research, Wente, Mirassou, Paul Masson, J. Lohr and Chalone started vineyards planted in sizes that ranged from sixty to several thousand acres, making it one of the largest premium wine grapes growing regions in California. Beginning the Hahn DynastyBeginning in 2007, Philip Hahn, (heir to the Hahn family winery), has been the CEO of the operation. Philip spent his early years on the family’s SLH vineyard estate, learning about the wine industry from the ground – up and started pruning vines in winter and picking grapes in the fall. He left the vineyard to study international politics at the Georgetown University School of Foreign Service. This was followed by an 8-year journey on Wall Street, returning to the family wine estate in 2007. He continued his studies at Columbia, earning a Master’s degree in biotechnology in 2012. Hahn was recently in Manhattan on a public relations tour. His mission – to give a heads-up to east coast wine consumers…there are delicious wines being made in Monterey, California, and it is time to bring a few bottles home to enjoy, and for restauranteurs and food/beverage managers to add Hahn wines to their wine lists. Currently the Hahn family is the largest vineyard owner and producer in the region and also maintains a 50,000-acre wildlife preserve in Kenya, saving wildlife and strengthening the economy. Total production of all Hahn Family Wines is about 400,000 cases annually from winery facilities in Soledad and Lodi (Cycles Gladiator label), making the winery one of the top thirty producers in North America. Hahn HistoryThe current success of the Hahn brand was started by Nicolaus (Nicky) Hahn who was born in 1936 in Switzerland, the son of a Jewish banker from Frankfurt, Germany who moved to escape the Nazis. Hahn spent his childhood moving through England, Spain, Portugal, Cuba and Los Angeles. He attended grade school in NY, high school in Switzerland and university in Munich where he studied economics and met his wife Gaby. Hahn had a successful career in Paris and New York, and chaired Computer Associates, an international computer software company in London prior to moving to Monterey County. Hahn was interested in pioneering – finding something that had not been done before and in 1979 Nicolaus and Gaby Hahn purchased a former horse and cattle ranch in the hills above California’s Salinas Valley, an area known for agriculture but not grape growing. Hahn became the wine pioneer of the Santa Lucia Highlands and the man responsible for the appellation designation in the 1991. Hahn was able to turn the loam and granite hillsides of the east-facing slopes of Santa Lucia Highlands into world-class vineyards. His first attempt focused on Bordeaux varietals and then he realized that the cool climate was better for Burgundy and he turned to Chardonnay and Pinot in the late 1990s. The sloping hills provide good drainage while the terrain and soil characteristics are suitable for planting, cultivating and harvesting grapes far away from urbanization. Soil temperatures are cooler than other parts of the state which limits the size of the crop and increases grape and wine quality. Because the plantings are relatively new, the vineyard masters in Monterey County have been able to combine years of experimentation and the best of proven traditional methods with modern technology and scientific research, creating a unique wine region in the USA. There are enough warm days, a short frost season and small chances of unseasonable and damaging rains. A major attribute is the cool air from Monterey Bay, creating a longer growing season. Air in the southern part of the country warms at noon each day and rises, cool air from the Bay fills the void left by the rising warm air. Monterey County grapevines produce buds in the spring, 2 weeks earlier than vines in other regions and the fall harvest begins 2 weeks later than other regions. Local grapes remain on the vine a full month longer, developing the characteristic intensity of flavor. The slowing maturing fruit offers intense varietal flavors and an ideal sugar-acid balance, creating a unique product of quality Monterey County wines. County viticulturists frequently encourage ripening of the

If so, you must have been attending Vinexpo/Drinks America (Javits, NYC) for a few days. Immediately add missing this event to your 2024 to-do list if you did. I am not alone in applauding this impressive program. I was able to sip my way through wines/spirits presented by over 440 exhibitors, representing 32 countries and considered to be the largest business-to-business trade show in the universe, dedicated to wine/spirits professionals in North America. If you buy, sell, write, review, or drink – this should be added to a to-do list. The global alcoholic/beverage market is estimated to be valued at $560.04 billion (2022). The growth rate of this market is projected to be 9.4 percent with an estimated value of $802.02 billion by 2026. As of 2022, revenue in the alcoholic beverage segment in the US reached $261.1 billion with a projected growth (from 2022-2025) of 10.51 percent per year. This two-part series includes: Part 1. Spirits Fuel the Economy An alcohol trend in 2023 suggests consumers are pivoting to spirits over beer as they are looking for “adventures” available through new cocktails. Successful brands will balance something new and wonderful without going over the edge…consumers want both familiar and unique. Part 2. Importance of Wine? Win/Win A review of the wine industry and how the new demographics and psychographics of the consumer is pushing the sector to morph every aspect of the business, literally from the ground up and through to the consumer. Old? Now New!Over time, wine has changed the way it is grown, produced, and consumed. Centuries ago, it was part of an everyday diet and used as a basic source of energy, especially for laborers, farmers, and working-class people. Now it has morphed into a hedonic good basically enjoyed in free time and on social occasions with strong status symbol implications. Wine, once traded as a bulk commodity is now considered a luxury, and fashionable. In high-income countries and/or among higher-income population groups, attributes related to culture, traditions, emotions, tourism, and discovery, the experience of novelty, self-identity, and signaling of social status – all contribute to motivations for the purchase and consumption of wine – in addition to aroma and palate pleasures. It is also interesting to note that wine is no longer bought to “just” be consumed; in some situations, its value increases with time, and it is bought and kept like other investments. Wine may be acquired, not as a substitute for beer and spirits for immediate imbibing, but rather as an alternative to art masterpieces or to other financial assets in portfolio diversification strategies. Not the Wine of Your GrandpaIn the wine industry change in demand has led to variations in one of the most complex agri-food industries and one of the most sophisticated agri-food products. Production technology has evolved in the vineyard and winery and the entire process has transformed. Grape cultivation has also been altered, reducing the number of varieties and the diffusion of a small number of ubiquitous vines that are spread globally. The wine itself has changed because of the different grapes used for making wine and an increased focus on quality and diversification in addition to the new emphasis on sustainable, organic, biodynamic, and ethnic attributes. The supply side has been transformed because of pressures that include a demand for a quality upgrade and product differentiation to better meet changing consumer interests. At the MarginsGrape production remains fragmented although in some countries grape growers and wine producers have been converted from small households only partially market-oriented to larger specialized companies better able to participate in national and global value chains. Additional influencers of transformation in the wine industry include wine technicians, oenologists, wine experts, wine journalists, and communicators – all basically related to process management, quality improvements, process and product certification, communication, and promotion. There is a new emphasis on the “wine experience” linked to a strong need for providing information and quality guarantees along the value chain and channels of distribution – all the way to the final consumer. Segmenting Wine ProductionIt is rare for the production of wine to be segmented; however, global companies have affirmed their role as traders and retailers as well as in their part as producers and packers due to multinational investment campaigns. The result? E-CommerceOnline shopping is directly impacting small producers and larger retailers operating on a global scale resulting in small producers who, thanks to a shorter supply chain, are able to increase their visibility in the final consumer market and capture a major share of this space. Economic Benefits of Wine IndustryWine is produced in 50 states in the USA. The production, distribution, sales, and consumption of wine benefits many sectors of the economy and generates approximately $276.07 billion in economic activity. In addition, it preserves agricultural land, provides American jobs, attracts tourists, generates taxes and enhances the quality of life. In the USA the wine industry includes approximately 10,637 producers (in 50 states) as well as 119,420 acres of vineyards. The industry provides over 1,007,459 jobs plus 364,234 positions in supplier and ancillary industries that offer goods and services to the industry and their sales depend on the wine industry’s economic activity. Ultimately, 1,844,901 jobs are created and supported by the wine industry. On average, employees in the industry earn $51,800 in annual income and benefits. The total wages generated by direct, indirect, and induced economic activity driven by the wine industry are approximately $95.49 billion. The industry also generates tourism and “wine country” regions produce 49.18 million tourist visits and $16.69 billion in annual tourism expenditures, benefiting local economies and tax bases (wineamerica.org, 2022). The wine industry generates tax revenues on the local, state, and national levels. In 2022, the industry paid approximately $8.15 billion in state and local business taxes, plus $14.67 billion in federal business taxes for a total in excess of $22.83 billion. The industry also generates almost $875.28 million in federal consumption taxes and $7.27 billion in state consumption taxes which includes