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January 2008, Volume 14, Number 1

Wine and Food

California. California's wine grape harvest averaged three million tons a year between 1997 and 2006, but reached a record 3.8 million tons in 2005. The harvest was 3.1 million tons in 2006 and 3.2 million tons in 2007. The 2007 crop had small berry sizes that increase the skin-to-juice ratio and enhance the wine's flavor.

Constellation Brands Inc, the world's largest wine seller, in November 2007 announced plans to acquire the US wine business of Fortune Brands Inc. for $885 million, expanding by 2.6 million cases with brands that include Clos du Bois (75 percent of the cases), Geyser Peak and Wild Horse. The 1,500 acres of vineyards in Napa and Sonoma counties included in the deal were valued by one analyst at $350 million, or over $230,000 an acre.

Kendall-Jackson Winery has 14,000 acres of vineyards in California and makes 3.8 million cases of wine a year. Jackson Family Wines labels such as Freemark Abbey, La Crema and Byron produce another 1.5 million cases a year, making the company the eighth largest wine producer in California and one of the most profitable.

Some wine grape growers complain that, with five US wineries accounting for 90 percent of US wine, under a wide variety of labels, there is downward pressure on grower prices.

Economist Antonio Rangel found that wine tasters thought higher-priced wines were more enjoyable than lower-priced wines. Tasters were wrongly told that one wine cost $5 a bottle and another $45 a bottle (both cost $5). Even though the tasters said the wines tasted the same, they registered more pleasure from the higher priced wine.

Washington. The Washington Wine Commission reported that the state had 530 wineries in 2007 that attracted two million visitors. Some 127,000 tons of wine grapes were harvested in 2007, less than five percent of California's three million ton harvest.

One area with a growing number of wineries is Woodinville, 30 minutes northeast of Seattle, which has had the Chateau Ste. Michelle winery since 1934 and in recent years added dozens more. Many of the wineries in the area buy grapes grown in the eastern part of the state.

France. France's Champagne region covers 86,500 acres in eastern France. About 79,100 acres are planted in grapes, and rules limit production to a maximum 15,000 kilos of grapes a hectare.

The Champagne area was determined by a 1927 law that took into account sun exposure, soil quality and groundwater levels; only wine made from grapes grown in this area may officially be called Champagne. An effort is underway to expand the Champagne region to keep up with booming demand. The last expansion began in 1951, but took several decades.

LVMH Moet Hennessy Louis Vuitton is the largest force in the world's $5.4 billion market for champagne, with six labels that range from Dom Perignon and Moet & Chandon to Veuve Clicquot. LVMH accounted for about 20 percent of global sales of Champagne in 2006. In the US, LVMH accounts for about two-thirds of Champagne sales and volume.

About 90 percent of the vineyards in the Champagne region are owned by independent farmers; LVMH owns 4,100 acres. LVMH wins the loyalty of these farmers by providing free technical assistance to care for their vineyards and harvesting their grapes at LVMH's costs (grape buyers must charge growers for harvesting). Farmers received about $7.50 a kilo for their grapes in 2007, or $3.40 a pound or $6,800 a ton.

The US displaced France as the wine consumer in 2008 (28 million hectoliters), compared to France (27 million hectoliters). French adults consume an average 58 liters of wine a year, while Americans consume 10 liters.

Food. The price of white truffle, the strong, garlicky-scented delicacy usually shaved into pasta, salad and omelets, is rising- in 2007, the price of 100 grams or 3.5 ounces in Italy was Euro 300 to 600, or $440 to $880. Black truffles are less expensive than white ones and have a highly pungent aroma.

Like mushrooms, truffles are the fruit of a fungus. They grow underground and rely on trees to host them and on animals that eat them to distribute their spores. They are harvested from October to December.

Japan uncovered a number of food safety and false labeling scandals in 2007. The demand for Japanese-produced food rose as a result of scandals in China, and some Japanese firms responded by, for instance, mixing pork and chicken with beef and labeling it beef. Some food companies changed expiration dates to sell old food, and raised questions about the safety of sushi, marbled beef and shark's fin.

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