ORGANIC WINE – It’s not wishful thinking

Consumers have let the green genie out of its bottle and organic wine is finally finding its rightful place in the mainstream retail space, writes Jonathan Goodall

It’s hard to get accurate data on the organic food and drink market, but looking at what’s going on around you should tell you all you need to know. When a former vice president of the United States embarks on a global tour with an eco-disaster movie, as Al Gore did with An Inconvenient Truth, it’s safe to say there’s change in the wind. Virgin Money, meanwhile, is launching a biodegradable credit card, while Tesco is developing green labelling to show the carbon footprint of every product in its stores. Consumers have released the green genie from its bottle and big business can’t afford to be seen trying to put it back.

The organic market in Europe and the United States has grown rapidly over the last decade. According to the Soil Association retail sales of organic products reached an estimated £1.6 billion in the UK in 2005, a 30% increase on the previous year. The SA adds that now nearly one in three shoppers “knowingly buys organic food” (strange wording, but still), with four out of 10 people buying organic food at least once a month.

Arguably the most successful organic drinks marketing story comes from Highland Spring mineral water which was granted organic status by the SA in 2001 and is now the number-one sparkling mineral water in the UK. Coincidence? Who can tell? But when it comes to organic marketing, does the wine trade have its finger on the mung bean, let alone the pulse?

Is it worth it?
First things first – and this is not the wine trade’s fault but is down to bureaucracy – there is virtually nothing labelled as “organic wine” that is worth drinking. There are, however, plenty of excellent wines labelled as “made from organically grown grapes”. It’s relatively easy to grow organic grapes – you just quit the chemicals and plant cover crops between the rows of vines to promote biologically active soil and biodiversity, thus attracting the friendly creepy crawlies to duff up the bad ones. The problems arise when you start trying to make wine either with minimal or without any sulphur dioxide which acts as an antioxidant and preservative. Off-flavours and oxidation have marred many a wine that has skimped on the sulphur in order to be labelled as “organic”, and this got the organic wine movement off to a very shaky start. When you consider that most consumers expect organic products to taste better than conventionally produced goods, this has been quite a problem. Most producers now go for the “made from organically grown grapes” option with a judicious slug of sulphur to maintain freshness and flavour.

Do “organic” and “made with organically grown grapes” have the same cache for the consumer? “I don’t think they can tell the difference,” admits Susan McCraith MW, who left Waitrose last year to set up Ethical Fine Wines “… for people who care”. Her philosophy is simple and sums up the attitude of those who are driving this market forward. “The increasing coverage in the media about the environment, social responsibility and ethical trading led me to think about ‘ethical’ wine, wines that address environmental and social issues. The key though is to find good quality wines that have these ethical credentials,” she says.

“And if I’m asking winemakers at tastings ‘What’s your environmental policy?’ at least I’m helping to put the agenda on the map,” she adds.

As with all marketing, organic or otherwise, it pays to know your target audience. “There are two distinct types of customer,” says Ben Walgate of “alternative” wine merchant Festival Wines in Brighton. “Number one who buys organic for organic’s sake, for the good of the planet and a perceived health benefit (less sulphites and the absence of chemical residues). The other, number two, the one we’re interested in, buys with quality in mind. Due to food production scares and climate change, the former customer has driven a huge boom in organic purchasing. The latter has been slower and more questioning but, due to the success of some of the world’s best producers [Joly, Leroy, Leflaive, Benjamin Romeo, Gauby, Palacios, Selosse, Zind-Humbrecht] in gaining acceptance for biodynamic [and organic] wines there is significant demand in the fine wine sector.”

Simon Legge at Brown-Forman Wines, which pioneered commercial organic grape growing and owns the Bonterra brand, agrees with Walgate’s analysis of the consumer. “To a committed organic consumer, the fact that Bonterra is made from organically grown grapes is a key motivator,” says Legge. “To non-committed organic consumers product quality credentials are more important, to the extent that even the packaging should look premium first and organic second. My view is that the growth of Bonterra will come from non-committed organic consumers and, thus, it’s important to focus on how best to attract this group without disenfranchising the ‘committeds’.”

A question of taste

Legge, who describes Bonterra as the leading organic wine in the “£8-plus superpremium sector”, explains, “Our mindset is more about attracting premium wine consumers and driving our share of this sector rather than restricting it to just the organic wine market, which we have difficulty in measuring. Our logic is the same as brands like Green & Black’s chocolates who see themselves primarily as a premium brand with organic credentials in the premium chocolate market which needs to attract premium chocolate consumers, thus broadening G&B’s appeal beyond the restrictions of a pool of organic consumers.”

Most ironically, it is through competition, the anti-hippy ethic, that the organic wine market has been able to broaden its appeal. With more, better quality, organic wines being produced, inferior samples are being weeded out, if you’ll pardon the pun, and the notoriously high prices of organic wines are coming down.

“It’s no good trying to sell an organic Chardonnay, for example, which costs more but does not taste as good as a conventionally produced Chardonnay from the same region – the same goes for carrots, tomatoes and chickens,” says Legge. “It must taste at least as good, if not better. Thus, the virtuous sales pitch for an organic product should be, in order of priority in the consumer’s mind, as follows: 1) it tastes better, 2) it’s better for you, and 3) it’s better for the environment. And we communicate this through tastings. Although it sounds a bit evangelistic, tasting is believing.”

It’s hard to give precise figures, but organic wines frequently carry a premium of between 10% and 20% over conventionally produced wines, largely to cover bigger wage bills. It takes three years for a conventional vineyard to convert to and be certified as organic, during which time production drops away while costs can increase by 5% to 10%, according to Ann Thrupp, manager of organic development at Fetzer Vineyards. Much of this is attributed to new weed management machinery. However, after the first three years, says Thrupp, growing costs become equal to or less than conventional growing costs as money is no longer being spent on synthetic chemicals.

“Labour is vastly more expensive than chemicals,” says Walgate at Festival Wines. “And furthermore, by sticking to the organics approach, when you totally abandon systemic fungicides, the risk of big drops in production can significantly alter the viability of a vineyard, especially at the lower end of production (sub-£5) where margins are critical.”

The “sulphur dioxide compromise” has certainly improved the quality of organic wines, but do they actually taste better? And does organic production add sufficient value to justify the premium charged?

The jury’s out
“At the bottom end there has to be a premium paid purely because so little money actually gets to the grower – we’re talking cents a litre,” says Walgate. “When you consider the certification costs and increased production costs this has to be reflected somewhere.

“But when we start talking about serious wines a premium cannot be justified for the method of production alone,” he continues. “What we’re paying for is quality, and quality alone. For example, an equivalent non-organic appellation wine may come in a little cheaper, but I’ll bet my bottom dollar that my organic counterpart is better value for money and a better representation of what that AOC really means. That’s the beauty of the biodynamic/organic approach: it takes you closer to the soil, to that X factor – terroir.”

The jury is out on whether organic wines taste any better than conventionally produced wines, but there is an argument that identikit chemicals pump identikit qualities into the soil, thereby reducing the influence of terroir. Others suggest that after a few years of organic production grapes become healthier because they are no longer in a cycle of chemical dependency, and they become truer to their varietal flavours.

As for the premium question, we buy organic goods with a clear conscience – and how much are we prepared to pay for that?

© db June 2007