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The Wrath of Grapes: The Coming Wine Industry Shakeout And How To Take Advantage Of It

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As the title indicates, if you are in the wine industry (at any point along the supply chain) or if you are considering entering the industry, read this book. If you are interested in learning how to taste wine, that is not the intent of this book. Lewis writes this book as an insider on the industry and from a consultant's perspective.

This book is a must read for anyone considering entering the wine business! Much of what Lewis writes could help fill out the majority of your business plan - from determining cash flows to gaining insight into the wine industry in general. Or at the least, you could use the book as a check on some of your assumptions.

If however, you simply want to learn how to taste & enjoy wine, you would do well to look for another book. His focus is purely from a business perspective.

The Wrath of Grapes; The Coming Wine Industry Shakeout and How to Take Advantage of It, Lewis Perdue, Avon Books, June 1999, ISBN 0380-80151-5. Paper. $13.50. 254 pages. This is a fascinating analysis of the world of American wine as an industry. Perdue has written 17 books, including 11 novels, founded Wine Business Monthly and Insider, and publishes Wine Investment. He has been an aide to a U.S. Senator and a governor, taught journalism at Cornell and UCLA, was a Washington correspondent for Dow Jones, Gannett and others, and acted as a wine importer and wholesaler.

His major theme: "Thou hast showed thy people hard things: thou has made us to drink the wine of astonishment." Psalms 60:3. He clearly describes the "hard things" he sees facing the US wine industry: over-supply in the face of flat consumption, devastating vineyard diseases, an antiquated distribution system; attacks from anti-alcohol forces; and an inability to capitalize on wine's proven health benefits.

His description of the nine major wine industry trade groups - not including state, county and local organizations - and a recent history of their activities is particularly enlightening. He argues that these divisions show up as a spectacular string of economic, political and organizational failures. He points out that Gallo is the defining presence in the US wine industry, often "an active contributor to the turmoil, but more often it lets the internecine war rage unabated, reasoning that the troubles of others can only help preserve its market dominance." He concludes that if you are looking at the wine industry as an investment, you must recognize that it cannot mount a concerted approach for anything - including meeting the gathering onslaught of neo-Prohibitionist attacks on alcohol in general.

He describes the vulnerability of a grapevine - called AxR1 - to Phylloxera, despite several warnings from international researchers that it was vulnerable. He estimates the cost to tear out these vines and to replant to others at $4 billion. He worries that the structural causes of the AxR1 problem still exist in American viticulture, which may lead to similar problems with other wine pests and diseases.

He reviews the evidence that wine is healthy, concludes that "people who drink in moderation live longer, healthier lives than either abstainers or heavy drinkers", and outlines several reasons that the message does not get through to consumers. For example, the total US wine industry is about $18 billion, advertising is about $100 million and estimates that anti-alcohol and drug groups have over $3 billion in funds. The budget of the Center for Science in the Public Interest is $18 million, twice the budget of all the wine trade associations combined.

His description of the three-tier system is worth the price of the book, for anyone who hasn't experienced it first hand. His conclusion: "The battle is between small shippers and the consumers they serve, and an entrenched, well-financed wholesalers' cartel whose money reaches into the pockets of legislators and public officials in every state and in the nation's capital. The outcome will most certainly affect your choices of wines and the prices you pay."

He argues that the profits for wineries during the past two years have come from increasing prices with tiny increases in unit volumes, so increasing profits cannot be sustained without increases in demand.

This background analysis leads to his basic economic conclusion: "Both wine and sex are best enjoyed for the sake of the love involved instead of the money.... You had better love wine because there is relatively little money to be made, and it is made by a very small handful of people. ... This is not a warning against investing in either wine or the companies that produce it. The right investment can offer hours and years of enjoyment and reward. Just do it with your eyes (instead of your wallet) wide open and your investment goals focused on the horizon of pleasure rather than profit."

There are also chapters on the costs of getting wine from the ground into the bottle; the costs and possible rewards of investing in wine itself; an approach to investment research before investing in public wineries; and the risks to investors (and the benefits to sellers) of winery REITs. He reinforces his message with the view of venture capitalists about the wine business: "It's too small; the tiny growth potential is not worth the risk; returns are too small; your market is shrinking."

Well worth reading and perhaps studying, whatever your interest in American wine.

I gave this to my boyfriend for Christmas since he and I are involved in the industry. Unless you are planning to really get involved in the industry, we wouldn't recommend this book. It is primarily about politics with the BATF and how the big guys (Gallo) shut the little guys out of the market.

I picked this book up by chance in a Calistoga bookstore. After reading the book "napa" I've become very interested in the behind the scenes goings on in the wine industry. I found Purdue's book informative and enlightening. OK maybe I'd rather not know some of the stuff but I had already had my "shock" by reading Napa. I still love a weekend in wine country and the beauty and sereness of the place. Visiting the wineries and talking with the people will always be a fun thing to do. My enthusiasm for it has not dwindled, I am simply a more informed "wine enthusiast" and will never be a "wine snob". Reading this book has made me so much more comfortable with choosing the wines I like for according to what tastes good to me and not because of price or reviews.

I picked this up as kind of a spur of the moment plane read, but found myself totally engrossed in the background information on the most sensual food or drink in the world. The author relates the ins and outs of the business and politics of the wine industry in an easy-to-read, conversational style. Recommended for everyone who enjoys a good glass of wine.

Lewis Perdue publishes the Wine Investment News and is the founder of Wine Business Monthly and the Insider, the dominant wine trade publications in North America, and he appreciates wine. He KNOWS what he is writing about. Pay attention. This is, perhaps, the best book available for gaining an inside look at the wine industry, learning about wine, and how to start a wine cellar that you find in one concise volume. (There is much more, too; these are just a few of the topics he covers.)

There seems to be a mystique surrounding wine in this country. Perdue says, "the greatest barrier to increased wine consumption is wine's snobby image." And the wine industry seems to want to bolster this image. No wonder we Americans have developed a deep-seated prejudice about wine. You're supposed to have red wine with meat and white wine for fish and then there are dessert wines and apéritifs, etc., etc. He tells us to forget the rules; find the kinds of wine you like and enjoy them with what you like. It makes sense.

Want to know a secret? Read the chapter on counterfeit wines. Find out how genuine Champagne is made, the similarity of sparkling wines, and the great switheroo that fooled most of the world (except the French) . And if you want to find something "they" don't want you to know, read about to store and serve wine because the plastic membrane inside the box collapses as wine is dispensed, thus preventing the introduction of air which can oxidize and spoil the wine.

"While the wine box seems like the perfect container . . . in reality most of the boxes you see are adulterated with substantial quantities of added alcohol, water, citric acid, fruit juices, and other flavors and chemicals. . . [U]nder a strict interpretation of [Alcohol, Tobacco, and Firearms] rules, a box of the sort could contain as little as 38 percent wine." And you (and I) thought we were getting the real stuff!

The most useful information, for me, was finding out about the glut of wine on the market that resulted from the unusually productive grape harvest in 1997. This over supply has led to some fantastic bargains in wine that should last through the next two to three years! There are many remarkable wines available now for under $10 a bottle.

The fun part of the book tells how to go about deciding upon which wines you want to stock; have some friends over, each bringing a bottle to try, and make notes on which ones you like or dislike. Then go out and stock up on the ones you like.

To gain a good understanding of the wine industry and to learn about wine, this is the one book you should read today. REVIEW: Lewis Perdue publishes the Wine Investment News and is the founder of Wine Business Monthly and the Insider, the dominant wine trade publications in North America, and he appreciates wine. He KNOWS what he is writing about. Pay attention. This is, perhaps, the best book available for gaining an inside look at the wine industry, learning about wine, and how to start a wine cellar that you find in one concise volume. (There is much more, too; these are just a few of the topics he covers.)

There seems to be a mystique surrounding wine in this country. Perdue says, "the greatest barrier to increased wine consumption is wine's snobby image." And the wine industry seems to want to bolster this image. No wonder we Americans have developed a deep-seated prejudice about wine. You're supposed to have red wine with meat and white wine for fish and then there are dessert wines and apéritifs, etc., etc. He tells us to forget the rules; find the kinds of wine you like and enjoy them with what you like. It makes sense.

Want to know a secret? Read the chapter on counterfeit wines. Find out how genuine Champagne is made, the similarity of sparkling wines, and the great switcheroo that fooled most of the world (except the French) . And if you want to find something "they" don't want you to know, read about to store and serve wine because the plastic membrane inside the box collapses as wine is dispensed, thus preventing the introduction of air which can oxidize and spoil the wine.

"While the wine box seems like the perfect container . . . in reality most of the boxes you see are adulterated with substantial quantities of added alcohol, water, citric acid, fruit juices, and other flavors and chemicals. . . [U]nder a strict interpretation of [Alcohol, Tobacco, and Firearms] rules, a box of the sort could contain as little as 38 percent wine." And you (and I) thought we were getting the real stuff!

The most useful information, for me, was finding out about the glut of wine on the market that resulted from the unusually productive grape harvest in 1997. This over supply has led to some fantastic bargains in wine that should last through the next two to three years! There are many remarkable wines available now for under $10 a bottle.

The fun part of the book tells how to go about deciding upon which wines you want to stock; have some friends over, each bringing a bottle to try, and make notes on which ones you like or dislike. Then go out and stock up on the ones you like.

To gain a good understanding of the wine industry and to learn about wine, this is the one book you should read today. END

I found this book to be very engrossing from the very first page! The author pulls no punches in stating his opinion and exposing the 'dirty little secrets' of some of the largest wime producers in California...a must read for anyone who enjoys wine or is interested in the wine business!

Perdue has seen fit for a decade now to talk about all manner of facts and situations that have no business being discussed in public. before he came along, the industry did just fine taking care of its own problems in private.

I can't quibble with his research and his facts, but his insane desire to let the whole world know about the political infighting and other private controversies are too much! I can see no valid purpose other than sensantional personal aggrandizment for writing in such details about things that are the industry's own and nobody else's business.

I've been in this industry for more than two decades now and can't see any reason to reveal all this. Don't buy this book. It will just hurt the industry.