Wine & Spirits - August 2012 - (Page 72)

Last Word The Moscato Disruption In their recent Innovation Issue, The New Yorker published an article on Clayton Christensen, a member of the faculty at the Harvard Business School who is best known for his book The Innovator’s Dilemma. In it, he describes the fate of successful, wellmanaged companies whose businesses suffered or disappeared when a new, disruptive technology came along. As Christensen points out in the book, companies often succeed by listening to their customers, but, paradoxically, “often begin their descent into failure by aggressively investing in the products and services that their most profitable customers want.” Meanwhile, a new product comes along that may not be as good, as reliable, or as profitable, but is just good enough and cheap enough to disrupt the entire market. For years, the US wine market was populated on the trade and consumer side by a small group of enthusiasts. Now the market has grown to be the biggest in the world, and what was once a quest for the best has become a demand for the good. Remember rappers partying with prestige cuvée Champagne? In 2006, Jay-Z even brought out his own label, Ace of Spades, priced at $300 a bottle. By the time the effervescence fizzled out of the economy, the hip hop crowd was already on to moscato. Sales took off, driven by music fans and twentysomethings. There’s now a group of rappers in St. Louis promoting its own moscato, Freaky. As Christensen might suggest, don’t look at the product, look at how the product is used. Perhaps people found they could get the same satisfaction out of a $5 or $15 bottle of fizzy moscato as they once did from a legendary Champagne. Why buy prestige when what you really want is refreshment? The Nielsen statistics tell their own story, showing moscato sales rocketing up 70 percent in 2011. And the category continues to expand, from the below-$10 brands like Barefoot and Sutter Home, up through new entries like Allure Pink and Seven Daughters to by Joshua Greene traditional Moscato d’Asti brands (including Saracco, a brand Kanye West talked up in 2005), and now on to drier still wines like St. Supéry at $25 and La Sirena from Heidi Barrett at $30. For now, rather than cutting into established business, moscato has brought a lot of new drinkers: Most of the twentysomethings drinking moscato are not people who once drank Champagne. But Christensen’s hypothesis raises the question: Might some of those twentysomethings once destined to become tomorrow’s Champagne drinkers continue to find moscato refreshing enough? Cheap fizz is nothing new, but suddenly it’s chic. Though it might be easy to dismiss moscato as the current white zin phenomenon, moscato does have a historical precedent in the Old World, and greater street cred among people who follow wine. If you serve a good Moscato d’Asti at your wedding, your wine-loving friends would drink it happily; they might not even miss the Champagne. If you serve white zinfandel, they’ll probably grab a beer. Moscato isn’t disrupting any producer hierarchy in the wine industry, at least not yet. Instead, it’s built a separate, less expensive entry into market—which is exactly how disruptive technology gets its start. Since Christensen wrote his book 13 years ago, disruptions have become a way of life in Silicon Valley, where new tech ventures arrive, rewrite the rules, build to an IPO, then often fade into a memory as the next disruptive technology arrives. He built his theory based on observing an industry with an exceedingly short lifecycle: the makers of computer disk drives. Unlike the disk drive industry, successful wine businesses have extremely long lifecycles—measuring their history in decades and centuries rather than years or quarters. Disruptions may take longer to play out in the wine industry, given the length of time it takes to establish new vineyards. But I wouldn’t be surprised if we were all drinking a lot more moscato in the years to come. I 72 W I N E & S P I R I T S A U G U S T 2 0 1 2

Table of Contents for the Digital Edition of Wine & Spirits - August 2012

Wine & Spirits - August 2012
Editor’s Note
Fined & Filtered: Lou Bustamante on cocktails aged in cask and bottle
Spirits: Tonic + Gin Reviewed by Lou Bustamante
North American Riesling
Tapas in the Capital of Cava
Prosecco + Prosciutto
Cirò & La Cucina Calabrese
Summer on the Road in Sonoma
Extreme Values
Tastings Overview
Summer Sparklers
US Riesling
Rías Baixas/Vinho Verde
Greek Wines
Northeast Italian Wines
American New Releases
Imported New Releases
Joshua Greene on moscato’s sweet disruptions

Wine & Spirits - August 2012