Key Issues Facing the Wine Industry: Sarah Kemp, Publishing Director, Decanter

China, and its evolution as a wine consuming/producing nation, is one of the most significant issues confronting the wine industry for the foreseeable future.  So said Sarah Kemp, Publishing Director, Decanter, when our conversation turned to key wine industry issues.  In previous posts I have reported on aspects of our conversation to include her entry into the wine publishing business and Decanter's positioning vis a vis its readers.  In this post I report on Sarah's views on the issues facing the wine industry.

According to Sarah, a fact that is not widely known is that by 2014, China will have as much acreage under vine as does Australia.  With this rapid growth of in-country capacity, it is probable that the west will be absorbing commodity wines from China in the not-too-distant future.  Wines made from grapes grown in China are not generally highly regarded but she tasted some Chinese wines that showed promise on her last trip over.

While future Chinese exports merit some consideration, the issue at hand is its seemingly insatiable appetite for First Growth Bordeauxs.  Sarah illustrates the state of affairs by revealing that 60% of the production of a particular St. Emilion chateau is going to China while 40% of Farr Vintners (UK wine merchant specializing in the purchase and sale of top Bordeaux wines) 2010 revenue was attributable to sales into the Asian market.  It is Sarah's contention that the business being done with China is under-reported because no one is tracking wines that come into the UK before being re-exported to China.  This increased demand is impacting the price of both new and old vintages of Bordeaux First Growths.

In response to a question on how the Bordelaise would balance new markets versus old, Sarah stated that top proprietors do not want to lose their traditional markets because the Chinese market is still immature and may not be able to withstand a shock at this early stage.  Snubbing traditional markets could prove to be a flawed strategy if such a shock were to occur.

A second big story, according to Sarah, is South America's rise in quality wine production.  This is a major challenge to Australia and New Zealand whose problems are compounded by UK advertising programs based on a "3 for £10" mentality.  This advertising program provides a great challenge for the really good wines.  Decanter just concluded an Australin Chardonnay tasting (February issue) and many of these wines were well received by the tasting panel and garnered good scores but selling these wines into the market will be difficult.

A third issue, especially for the European wine industry, is falling consumption.  There are a number of factors driving this issue: (i) there is greater concern in Europe about health and wellness issues; (ii) much more focus on physical appearance and the things that need to be done, and avoided, in order to promote a better look; and (iii) a generation that is growing up with new world wines.  In the latter case, the US experience may be a shot across the European bows.

Sarah foresees a major Bordeaux chateau being snapped up by Chinese investors at some point in the future.  There is already Chinese ownership of minor Bordeaux properties (February, March Decanter issues) but if it is so prestigious to own a bottle of a First Growth, think how much more prestigious it would be to own one of those properties.

Part II of my Conversation with Sarah Kemp, Publishing Director, Decanter

On Friday February 4th, I sat down with Sarah Kemp, Decanter Publishing Director and founder of Decanter.com, to discuss Decanter, its readers, and key wine industry issues.  I reported on Sarah's entry into the business in a previous post and now turn to a discussion of Decanter and its readers.

Sarah sees Decanter as a magazine for people who are interested in wines with personality; non-commodity wines.  Wine, according to Sarah, has a language all its own and exerts a socializing influence on its adherents.  She cited the Yquem Bordeaux Weekend experience to illustrate her point.  The weekend brought together people from different countries and backgrounds yet, within a few minutes, attendees had "gelled."  They shared a love of wine and a common language and could converse at length on the subject without the eyes of the other party "glazing over."

Decanter is a communication tool and a reader is making a statement when he/she take out a subscription to the magazine; according to Sarah, "they have crossed a bridge."  Decanter strives to meet that customer's expectations by providing content and events that entertain, guide, and educate on old and new regions, personalities and estates.  Decanter accomplishes these objectives by bringing a "broad church" of experts to the table.  One of Sarah's jobs is to find the best and most authoritative experts and provide them a platform and, in so doing, expose the reader to a broad range of views on any single topic.  Decanter will have done its job if the information and events that it provide increases the confidence of the reader in his/her own taste.

Part I of a Conversation with Sarah Kemp, Publishing Director, Decanter

Decanter is the UKs foremost wine magazine and one of the most respected across the globe.  With a 90-country subscriber base, Decanter commands the attention of the world's major fine wine producers as they seek to get their message heard above the clamor that is the world wine industry.   Its mix of news, interviews, and wine/wine-region reviews keeps its subscriber base informed  on industry happenings and aids purchasing decisions.  Its eclectic mix of world-renowned contributors, its online offshoot, and a newly minted education initiative all contribute to making Decanter readers some of the best-informed wine consumers in the world. 

Sarah Kemp is the Publishing Director of Decanter and the founder of Decanter.com.  I sat with her to gain some insight into the magazine's view of the issues confronting the wine industry today and will report on that conversation in this and two subsequent posts.

I first met Sarah at the Decanter-organized Bordeaux d'Yquem Weekend and was favorably impressed by this fun-loving, story-telling bon vivant who exhibited a deep knowledge of, and connection with, the Bordelaise.  At the time I asked her if I could interview her for my blog at some future date and she responded in the affirmative.  Once it was determined that I was going to be in London for the Chateau La Mission Haut-Brion tasting, we agreed to meet on Friday, February 4th  for our conversation.

I arrived at the Blue Fin Building in London's Southwark district in good time for our 11:00 am meeting and took the elevator to the ninth floor.  I was met at the elevator by Shreena, a TA in the Events organization, and led through a warren of desks and magazines and industrious-looking young people to Sarah's office where I was welcomed with a warm hug (We do not stand on formality here.).  I had not seen Sarah since the evening of the dinner at Chateau d'Yquem so we spent some time catching up and reminiscing.  It was a blast; and then we turned to the business at hand.  I told Sarah that I wanted the conversation to focus on three broad areas: How she got into the business (wine and publishing); Decanter's role and positioning vis a vis its readers; and the key issues facing the wine industry.  She said "let's go."  And we went.

Based on Sarah's telling, where she is today is totally attributable to a number of key influencers in her life.  Her grandfather loved wine while her father had no palate.  When she attained her 16th birthday, her grandfather gave her a copy of Hugh Johnson's Wine Companion (2nd edition) and the lovely drawings and vignettes in the book sparked her imagination.  This initial flame was fanned by two early relationships.  First, a boyfriend whose father was an avid oenophile (and a subscriber to Decanter no less) and, second, a girlfriend who took her to many a wine tasting.  Her father did not have a palate but he was a journalist and from a young age Sarah was surrounded by writing, publishing, and media-related issues.

Sarah's first publishing job was with the magazine Field which, ironically, is just down the hall from where she sits today.  When an opportunity to work for Decanter presented itself, she leapt at it and, after 25 years, with the magazine remains excited about where she works and its prospects.

Even though she has this senior position at Decanter, Sarah does not view herself as a wine expert a la Jancis Robinson (She subscribes to the adage that the more you learn about wine, the more you find out how much you don't know.).  Rather, Sarah views herself as a passionate wine drinker and wine lover;  akin to a Decanter reader.  Bordeaux wines are her first love but she also has an appreciation for wines from the Stag's Leap District of Napa, Washington State, and South America.

She finds the wine industry eminently fascinating with family-owned businesses sitting side-by-side with corporate titans and drama and soap operas, especially in Bordeaux, being the order of the day.

This post covered Sarah's introduction to wine and the magazine industry and her perspective of her positioning within that environment today.  In subsequent posts the conversation will cover Decanter and its readers and wine-industry issues.