At the end of 1996, the British Economist published its recommendations for the coming investment year, as the editor-in-chief of Wineparty told me years ago. Among the ten tips was an asset class that had previously interested mainly people who enjoyed drinking something: vineyards in prestigious appellations. It was a remarkable moment in the business press – not without consequences. International finance had just discovered wine. Of course, there had already been investors who bought famous châteaux, and a few collectors who stored their bottles in the hope of rising prices. But now the vineyard itself became a serious investment recommendation. Thirty years later, winegrowers are facing full cellars, falling prices and a clientele that apparently is no longer particularly interested in what the wine world has to tell it. The obvious explanation is that people are drinking less alcohol. The more interesting question is whether the wine industry thoroughly put them off drinking in the meantime.
We need to remember the world of 1996. Wine was already on the rise at the time. Robert Parker had transformed the international trade, the great Bordeaux châteaux were increasingly selling their wines to a global audience, and in the restaurants of affluent Western society the wine list had become a mark of a certain sophistication. Nevertheless, wine was not yet the global prestige industry it would become over the following decades. There were famous names, expensive bottles and passionate collectors. But there was also a reasonably clear distinction between a drink one consumed and an asset one stored because it was supposedly going to become ever more valuable. That distinction began to dissolve. Vineyards became investment assets, bottles tradable commodities, vintages promises of returns. Anyone buying a château was increasingly also acquiring the hope of extraordinary appreciation. And anyone buying a famous wine no longer necessarily had to drink it. Owning it was enough.
Years followed in which the prices of famous Bordeaux and Burgundy wines reached, in some cases, grotesque heights. Individual wines became several times more expensive, some even rising to more than ten times their previous prices. The development was by no means linear. The financial crisis of 2008 interrupted the rise, the Chinese market subsequently sparked a new boom, and later corrections showed that even great wines are not exempt from the laws of economics. One example is particularly revealing: Château Mouton Rothschild 2000 was initially offered in London at around £1,580 per dozen. Two decades later, the market price stood temporarily at around £19,000. Anyone who still calls that a normal price development for an agricultural product probably also regards a private jet as a means of everyday transport. Capitalism had achieved one of its finest feats: it had created a drink whose enjoyment could appear economically irrational.
The big names made the headlines. Yet the real economic impact took place far beyond their vineyards. The boom gradually reached regions that could only dream of the prices commanded by a Romanée-Conti or Lafite Rothschild. Investment took place everywhere. New wineries were built, old businesses modernised, vineyards newly planted or brought back into cultivation, tourist offerings created and export markets developed. In many regions, this was a welcome development. Poor wine improved, forgotten appellations received attention, and winegrowers were able to make a living from their work for the first time without having to find another source of income on the side. The problem lay in the expectation that this development would continue indefinitely. When demand grows, prices rise. When prices rise, investment follows. When investment takes place, supply grows. And sooner or later an industry faces the unpleasant realisation that demand is not a law of nature. A vine needs several years before it produces economically significant yields. A new winery is built for decades. A vineyard cannot simply be closed down like a fashion shop that has lost its customers. However, it would be wrong to explain global surpluses solely through new planting. In the long term, the global vineyard area has by no means grown everywhere. In numerous traditional wine countries, it has already been reduced. What there has been instead is regional expansion, productivity gains and enormous capital investment, while demand moved ever further away from expectations. Viticulture does not simply have too many vines today. In many places, it has too many vines for the wines that anyone still wants to buy at the prices available.
Alongside its economic rise, a second movement developed whose consequences may still be underestimated: wine became increasingly complicated. More precisely, engaging with wine became something that increasingly had to be complicated in order to appear interesting. At some point, the great classic appellations were no longer exciting enough. New stories were needed. New regions, new grape varieties, new production methods, new philosophical convictions. Orange wine, natural wine, amphora wine, pét-nat, indigenous grape varieties, forgotten terraces, volcanic soils, ancient vines, wild yeasts, minimal intervention, maximum authenticity. The Jura was rediscovered, as were numerous lesser-known areas of Spain, Italy, Greece, Georgia and the Balkans. Every discovery created new discoverers. And every new generation of discoverers had to find something that their predecessors had overlooked. There is fundamentally little objection to this. The rediscovery of old grape varieties is among the most positive developments in recent wine history. Fascinating wines have been made in the Jura for centuries, the Penedès offers far more than the usual industrial sparkling wines, and many indigenous varieties possess an unmistakable character. Natural wine has also enriched the industry in some respects. It raised legitimate questions about cellar interventions, industrial methods and the standardisation of taste. The problem began where a taste preference gave rise to a sense of moral superiority. Suddenly, a wine was no longer considered interesting because it tasted good, but because it supposedly stood on the right side of history. As little sulphur as possible became a badge of personal integrity, cloudiness an aesthetic stance and a certain farmyard smell proof of artisanal honesty. To some supporters, the possibility that a wine might be faulty already appeared to be an impermissible attack on the winemaker's freedom.
We need to imagine this development from the perspective of an ordinary wine drinker. A man orders a glass of white wine in a wine bar. He would like something fresh, dry and pleasant. The waiter explains that the wine on offer comes from an indigenous variety grown on volcanic weathered rock, spontaneously fermented, bottled unfiltered and produced according to the principles of regenerative agriculture. The guest is then served a cloudy liquid that smells of apple vinegar and a forgotten fruit bowl. When he cautiously asks whether it is meant to be like that, he is told that he first needs to get used to this kind of wine. The real message is: the problem is with you. Your palate has not developed far enough yet. There are presumably more pleasant ways of getting people enthusiastic about a drink. Of course, this example is exaggerated. The best natural wines are excellent, and many of their producers work with a seriousness that some conventional large-scale wineries could learn from. But the scene has produced a tone that has become symptomatic of the wine world as a whole. Enjoyment had to be justified. Preferences were judged. Someone who preferred a classic Chardonnay could suddenly feel like a person admitting at a literary event that they enjoyed reading crime novels. And anyone ordering an uncomplicated, technically cleanly made wine risked giving the impression of being on the wrong side of an imaginary cultural divide.
In politics, one would speak of an estrangement between elites and the public. In the wine trade, it is often called a necessary development of taste. The parallel is tempting, even if it has its limits. A small, opinionated group defines new standards, declares them to be the progressive norm and is then surprised that a considerable part of the public does not want to join in. The wine drinker who has happily drunk Rioja, Chianti or Grüner Veltliner for decades is suddenly expected to understand why they ought to prefer an oxidatively matured wine from an almost extinct grape variety. If they do not, they are regarded as insufficiently curious. The old conservative suspicion that progress occasionally consists mainly of making other people's habits seem distasteful finds ample nourishment here.
Then there was the media industry. Wine had become a popular journalistic subject in the 1990s. The great vintages, rising prices, international stars and new wine countries: there was always something to report. At some point, however, the story of the next great Bordeaux had been exhausted. So new sensations were needed. The rediscovery of an almost forgotten grape variety offered a better headline than the news that a winegrower had once again produced an excellent Riesling. A wine made according to the principles of a radical natural-wine philosophy was more interesting journalistically than a superbly made classic Weißburgunder. The exception became news; the norm disappeared from view. Anyone wanting to succeed in the attention economy had to stand out. Ideally with a wine that looked different, smelled different, tasted different and had a story that could be sold as socially relevant in just a few sentences. This created a peculiar imbalance. The media increasingly reported on those wines that accounted for only a small proportion of actual consumption. The great majority of buyers who bought a familiar bottle in a supermarket, from a merchant or in a restaurant scarcely appeared in this narrative. Their preferences were too ordinary to be interesting. At the same time, the industry complained that wine was reaching fewer and fewer people. One might conclude that there is a connection between these two developments.
But caution is needed. There is still no convincing empirical evidence that orange wine, natural wine or the rediscovery of indigenous grape varieties has reduced global wine consumption. The idea that a few particularly zealous sommeliers drove millions of people towards mineral water works as satire, but is too simple as an economic explanation. The decline has deeper causes. In traditional wine countries, per-capita consumption has in some cases been falling for decades. Younger people drink alcohol less frequently, health concerns are becoming more important, restaurant visits are becoming more expensive and disposable incomes are under pressure. There has also been a change in leisure culture. Those who eat together less often, spend less time at the table and increasingly organise their social contacts digitally also have fewer opportunities to drink wine. These are structural changes that cannot be remedied with a different wine list. Markets that were once regarded as reliable engines of growth have also lost their dynamism. The United States, the United Kingdom, Australia and China can no longer automatically compensate for declines in traditional European wine countries. Market researchers IWSR point out that there are not necessarily fewer wine drinkers everywhere. Existing consumers often simply drink less frequently. For an industry that has geared its investments towards constantly rising sales volumes, that is distinctly bad news.
And yet it would be too convenient to absolve the wine industry of all responsibility. There is a difference between the actual decline in consumption and a cultural withdrawal from the subject of wine. People can drink less for health or financial reasons while continuing to take pleasure in wine. But they may also get the impression that the whole affair has become too expensive, too complicated and too demanding. The simple pleasure of the drink disappeared beneath a remarkable quantity of well-intentioned explanations.
The concept of mindfulness fits particularly well here. It is one of those words that gives our age the opportunity to turn even a glass of wine into a form of personal development. One is supposed to smell consciously, taste consciously, enjoy consciously, appreciate its origin, understand the winemaker and open oneself to one's own perceptions.
Particularly appealing is the contradiction between the two great movements of the past three decades. On the one hand, the financial world transformed wine into a luxury good whose value is measured by its scarcity and market price. On the other, a new cultural avant-garde declared wine to be an expression of ecological, social and occasionally moral convictions. Both movements viewed the drink with a certain suspicion as soon as it was simply drunk. One wanted to store it; the other wanted to explain it. The speculator and the natural-wine missionary are therefore closer to one another than they would probably like to admit.
This is particularly bitter for those winegrowers who believed they had done everything right over the past few decades. They invested in quality, improved their wineries, reduced yields, switched to more sustainable farming, developed export markets and created distinctive profiles. In doing so, they followed precisely the recommendations given to them by the experts. Today, some of them are discovering that although their wines are excellent, too few people are available to buy them. It would be cynical to accuse these businesses of having allowed themselves to be seduced and led astray by a fashion. They acted according to the economic expectations of their time. Those expectations may simply have been wrong. An industry that expands for decades inevitably develops an interest in maintaining its own optimism. Associations, consultants, merchants, journalists, sommeliers, wine academies and event organisers all live, to varying degrees, from wine being perceived as an important, interesting and economically promising subject. Hardly anyone makes money from the news that the world already has enough wine. So people continue to talk about new regions, new markets, new target groups and new consumption occasions. Even the current decline is readily described as an opportunity for repositioning. One merely needs to become younger, more sustainable, more authentic, more accessible, more digital and more international. Then, so the hope goes, everything will be fine again. It is rather like a doctor advising an overweight patient to modernise their wardrobe.
This does not mean that the great achievements of the past few decades should be undone. The quality of many wines is better today than ever before. International diversity is fascinating, and the rediscovery of forgotten appellations has broadened our horizons. It would be absurd to lament these developments. But an industry can choke on its own successes if it draws the wrong conclusions from them. The fact that wine is interesting does not mean that everyone must constantly be interested in it. The fact that its production is complex does not mean that its enjoyment should be complicated. And the fact that a bottle can cost an extraordinary amount of money does not mean that every wine drinker must be willing to spend an extraordinary amount of money.
Today's crisis is therefore neither exclusively the result of excessive investment nor the just punishment for thirty years of oenological megalomania. It has real economic, social and demographic causes. But megalomania may have contributed to wine being particularly poorly prepared for these changes. An industry that continually made itself more important may have noticed too late that it meant less and less to many people.