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January 2010, Volume 16, Number 1

Wine, Food, Coffee & Tea

The US Bureau of Alcohol and Tobacco Tax and Trade has recognized 190 American Viticultural Areas since 1978, including 14 in the Napa Valley. Wine labeled with an AVA must include 85 percent grapes from that AVA. In December 2009, Calistoga became the 15th Napa Valley AVA.

About a third of the wine consumed in the US is imported, including wine that is imported in bulk (using polyurethane bladders) and blended with US wine before being bottled. Fred Franzia, CEO of Bronco, notes that 70 percent of California wine is produced in the San Joaquin Valley, and urged San Joaquin Valley growers to lower grape production costs to compete with wine imported from Australia, Chile and other countries. In November 2009, Franzia urged growers to maximize their use of machines, including having their grapes custom picked.

Sales of wines costing more than $20 a 750 ml bottle fell at least 20 percent in 2009, while sales of wine costing less than $6 a bottle rose six percent. Many consumers who drink wine regularly traded down to lower priced wines, which are a specialty of Australia, Chile and New Zealand. Sales of so-called super value-wines priced at less than $3 a bottle rose in 2009.

Wineries. The 50 largest US wineries produce about 85 percent of US wine; the Marin Institute reported that the seven largest produced 82 percent of US wine in 2008, including, E&J Gallo, which sold 67 million cases of wine in the US; the Wine Group, 56 million cases; Constellation Brands, 46 million cases; Bronco, 20 million cases; Foster's, 18 million cases; and Trinchero, 12 million cases.

Most wineries are small; 55 percent of US wineries produced less than 10,000 gallons of wine in 2004, and collectively they produced less than one percent of US wine. WineAmerica, a trade association of 800 wineries, says that many US wineries are second careers for those with savings from a first career. Such "success-driven" wineries often lose money, even if their owners have business skills such as marketing. WineAmerica estimated there were 5,600 US wineries in 2008, including 2,700 or half in California.

The Congressional Wine Caucus claims 250 members, making it one of the largest caucuses.

Wine Ratings. There are many competitions at which wines are judged. Humboldt State statistician Robert Hodgson evaluated the consistency of the 70 judges at the California State Fair and found that they are inconsistent in rating the same wine.

Each judge was given the same wine three different times, but their ratings varied. Most wines receive 80 to 100 points in tastings. State Fair judges' ratings of the same wine varied by up to four points, meaning that a wine rated 90 during one tasting could be rated 86 to 94 the second or third time it was tasted. A second study examining wines that were entered in five or more competitions found that the probability of winning a gold medal in any competition was about nine percent.

One winery sent the same wine with three different labels to a competition. Two entries won no medals; the third won a double gold medal.

Champagne gets its bubbles from carbon dioxide; there are said to be 20 million bubbles in a bottle of champagne, and each one alters the wine's taste, scent and fluid dynamics. Champagne gets its bubbles via a second fermentation in a sealed bottle, which increases the CO2 pressure in the bottle to about six times normal atmospheric pressure.

When the bottle is uncorked, most of the CO2 quickly dissipates in a distinctive mist around the open bottle neck, but enough remains to generate millions of bubbles. Once settled after pouring, a glass of highly carbonated champagne effervesces at the rate of about 400 bubbles per second, compared with a rate of about 150 bubbles per second for beer.

Global. There is too much wine, especially in countries such as Australia and New Zealand where production expanded over the past two decades and exports to the UK and US rose. The 2008-09 recession slowed the growth in wine sales, forcing wineries to sell more wine in bulk at lower prices. One result is for-sale signs amidst lower vineyard prices.

New Zealand crushed almost 300,000 tons of grapes in 2009 from 80,000 acres of wine grapes; it exports over half of its wine production, especially sauvignon blanc.

Wine producing countries would like to sell more wine in Asia, which has 60 percent of the world's residents. Most Asian countries tax wine heavily; China levies a 48 percent tax on wine imports. However, Hong Kong in 2008 eliminated import duties on wine, and imports almost doubled. Some of the wine imported to Hong Kong is destined for China, where a red Bordeaux, 1982 Chateau Lafite Rothschild, is highly prized.

Paris restaurant La Tour d'Argent (tower of silver), founded in 1582, sold some of its 450,000 bottles of wine and cognac in December 2009 to raise funds and regain Michelin stars? it slipped from three to one.

Food Ratings. Several private organizations develop labels signifying healthy foods, so that consumers in a hurry can choose healthier items. Hannaford Supermarkets used an independent panel to assign up to three stars to the foods it sold, enabling mothers to allow their children to select, for instance, any cereal with three stars.

Food manufacturers paid up to $100,000 a year to another organization, Smart Choices, which allowed them to place a green checkmark on the front of products that meet its nutritional criteria beginning in summer 2009. However, Smart Choices came under fire when sugary cereals such as Fruit Loops and mayonnaise received green checkmarks. The FDA issued a warning letter in October 2009 and announced that it would regulate nutrition claims made on the front of food packaging. Food manufacturers including PepsiCo began to distance themselves from Smart Choices in Fall 2009.

McDonald's is the world's largest restaurant chain, with over 31,000 restaurants and 1.5 million employees in 120 countries. The US, where the average tab at McDonald's is $4, generates the most profits, but France, where the average tab is $15, is the second most profitable country for McDonald's.

Americans spend $9.2 billion on vitamins, according to Nutrition Business Journal: 40 percent are bought at natural and specialty retail outlets; 35 percent via mail order or from a health care provider; and 25 percent at supermarkets and other stores.

Locavore. The local food or locavore (a word coined by Berkeley chef Jessica Prentice and popularized by Michael Pollan) movement got its start in the San Francisco Bay Area. Locavores believe that food should not travel more than 100 or 150 miles from farm to fork; supporting local farmers, they argue, results in fresher food and less energy consumed in moving food long distances (about a seventh of US energy is used to produce and transport food).

Farms in the US have became fewer, larger, and more specialized in the 20th century. In 1930, there were almost six million US farms producing an average five crops on 150 acres; today there are two million farms producing an average 1.5 crops on 400 acres.

Specialization, trade and transport have made fresh produce available year round, offering a potentially healthier diet. On the other hand, farm policies and scale economies have greatly reduced the cost of grain-based products, encouraging consumption of fast and processed foods and perhaps contributing to obesity.

For some commodities, it may be difficult to return to local foods, as with coastal fish. Many California restaurants are switching from local to imported fish because of the drop in local catches. About 75 percent of the fish consumed in the US is imported, usually from China.

Coffee. Global production of coffee was about 129 million bags in 2008/09, including two-thirds in five countries--46 million bags produced in Brazil; 16 million in Vietnam; 10 million in Colombia; nine million in Indonesia; and six million in Ethiopia. Coffee production fluctuated between 104 million and 129 million bags in recent years.

Coffee exports were 94 million bags in 2008/09, about 73 percent of production. The leading exporters were Brazil, 28 million bags; Vietnam, 15 million; Colombia, 10 million; Indonesia, five million; and Ethiopia, four million. Coffee exports fluctuated between 76 million and 95 million bags in recent years.

The coffee paradox refers to the widening gap between producer and consumer prices. Consumers pay about $70 billion a year for coffee, but coffee producers receive only about $5 billion. The world price of coffee peaked at almost $1.80 a pound in 1997, fell to a low of $0.40 a pound in 2001-02; and was about $1.20 a pound in 2009.

Tom Standage in "A History of the World in Six Glasses" emphasizes that coffee replaced weak beer as a morning drink among white-collar workers in growing European cities in the late 1600s. Urban water was not safe; boiling water to make coffee gave white collar workers an extra stimulus that, Standage argues, contributed to the scientific discussions in coffee houses during the age of reason?he calls coffeehouses the internet of their age.

Coffee likely originated in Yemen in the mid-1400s and spread to Mecca and Cairo by the early 1500s. Originally used by Sufis to stay awake during religious ceremonies, coffee soon became a legal alternative to alcohol in Muslim societies, and coffeehouses emerged as the Arab counterpart to taverns as places to talk and play games. The Dutch in the 1700s planted coffee trees in what became Indonesia and the French in the West Indies, undercutting Arab producers.

By 1700, when London had about 600,000 residents, there were over a thousand coffee houses. Taverns in England and wine merchants in France opposed coffee houses, but to no avail. Meanwhile, coffee houses became specialized meeting places in London, attracting those interested in shipping, finance, or politics, with many regular customers using the coffeehouse as their address. Some coffee house groups evolved into businesses, including Lloyd's of London.

Tea. Tea, an infusion of the dried leaves and buds of an evergreen bush, Camellia sinensis, evolved in southwestern China. Tea drinking was spread by Buddhist and Taoist monks, was cultivated, and became the national drink of China by the Tang dynasty between 618-907AD. By 750, China had 50 million residents, and Changan (today's Xi'an) had two million. Standage calls tea, made with boiled water and including phenolics (tannic acid), a water purification system that improved public health

Tea was taxed and used in ever more elaborate ceremonies in China, but fell out of favor during the Mongol Empire (1206-1368), when koumiss (fermented mare's milk) replace tea. Tea drinking and ceremonies resumed under the Ming dynasty (1368-1644) and soon spread to Japan, but did not reach Europe in commercial quantities until the early 1600s.

Britain embraced tea in the 1700s, reflecting the desire of the British East Indies Company to profit from trade and the fact that tea was safer than water. At its height in the late 1700s, tea accounted for 60 percent of BEIC trade and duties on tea 10 percent of British government revenue. Coffee houses were generally closed to women, but teahouses, including one started by Thomas Twining, welcomed women, tea gardens became acceptable places to meet the opposite sex, and Wedgwood created tea services.

There were many reasons why the Industrial Revolution began in Britain, ranging from the Protestant work ethic to ample coal and a scientific tradition, but Standage credits tea breaks in factories with fueling the Industrial Revolution. Farm workers often received weak beer, which tended to slow down the pace of work, while tea kept workers alert for long shifts.

Britain levied a duty of about 100 pounds a ton (12 pence a pound) on tea in the 1770s; the duty on tea arriving in the American colonies was a lower three pence a pound. The Tea Act of 1773 gave the East India Company a monopoly on tea imports to the American colonies, triggering the December 16, 1773 dumping of tea in Boston harbor, the closing of the Boston port until the East India Company was compensated, and ultimately the Revolutionary War.

The East India Company's fortunes were revived in the 1800s because of its monopoly on opium production in British India, which could be traded to China for tea. The Chinese government attempted to halt the opium trade, but lost the Opium War of 1839-42 and ceded Hong Kong to the British. However, the East India Company encouraged tea production on plantations in Assam, India, and by the early 1900s, tea could be produced far more cheaply on plantations in India than in China (the East India Company was dissolved in 1858, when Britain took direct control of India).

Water. The Safe Drinking Water Act of 1974 allowed EPA to test drinking water, and by 2000 EPA established safe levels for 91 contaminants. However, testing has found up to 60,000 chemicals in US drinking water.

The Environmental Working Group collected water data from over 45,000 municipal water systems, and the New York Times on December 17, 2009 reported that many provided water that was contaminated with some of the newly found chemicals. The question is whether these new chemicals, and interactions between them, pose risks to human health.

Efforts to regulate perchlorate, a rocket fuel additive, led to attacks by military contractors and the Pentagon; affected industries also attacked studies of the impacts of trichloroethylene, a degreaser used in manufacturing, and perchloroethylene or perc, a dry-cleaning solvent.

About three-quarters of US water systems are private entities, answerable to their shareholders and the Safe Drinking Water Act; private wells are not regulated.

Charles Duhigg, "That Tap Water Is Legal but May Be Unhealthy," New York Times, December 17, 2009. Leonard Mlodinow, "A Hint of Hype, A Taste of Illusion," Wall Street Journal, November 14, 2009. Marin Institute. 2009. The Myth of the Family Winery: Global Corporations Behind California Wine. December. 2009. Standage, Tom. 2005. A History of the World in Six Glasses. Walker & Company.

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