How Important is the Market in the Making of Terroir? In Conversation with Pedro Ballesteros MW
As 3-Michelin Star Chef Joan Roca once said: “To cook well, you need people who eat well”. By extension, to produce fine wine, you need people who drink fine wine. It sounds very logical—except that the classic definition of terroir usually relies upon the holy trilogy of soil, climate, and people, which is usually taken to refer to the people who make the wine.
But it’s also true that proximity to a major city or transport node has historically been critical in the development of fine wine. What would Champagne be without proximity to Paris? How would Rioja have developed without the coming of the railroad? What, therefore, does the current state of international transportation and market development mean for the future of fine wine?
We spoke to Pedro Ballesteros Torres MW who is, among many other things, national expert at the OIV, a noted wine judge, and a holder of the Spanish Order of Agricultural Merit.
ARENI
Pedro, what is your own personal definition of terroir? Your personal definition of fine wine?
Pedro Ballesteros MW
Terroir? Well, I would repeat the official definition of terroir: something that is the unique combination of soil and climate [plus] some usual practices, that produces a wine that is different organoleptically. The problem of this definition is that, if you analyse it, it’s a little bit awkward.
First thing, the unique combination of soils and climate is something that is obvious, because this happens for everything. The environment we grow in impacts us all. The first thing one could wonder is: why make a definition of something that is so obvious? But then there are two things that make the definition even more strange.
The first thing is that one could very reasonably ask how large is terroir. Is a terroir as big as an appellation such as Languedoc, Bordeaux Superieur, or Alsace? Or is a terroir a smaller area, such as a very particular vineyard?
Now the second question about terroir is also quite worrying, because terroir refers to community practices. So you need history for terroir. So the poor people in Margaret River or in Ningxia or the Finger Lakes, they don’t have the right to have terroir because they don’t have history.
We have our heroes, the monks, because they were four centuries analysing the conditions and explaining the terroir. But this is complete nonsense, because we already know that you need between two and three years to support a perfect terroir. And this is not because we have a very high level of science and technology, but because we have common sense. So the whole thing of centuries of history to justify the excellence of our terroir is pure marketing.
This compulsory regard of history, tradition is pure commercial protection.
The whole thing of centuries of history to justify the excellence of our terroir is pure marketing. This compulsory regard of history, tradition is pure commercial protection.
Pedro Ballesteros MW
ARENI
So, do you think that the word “terroir” still has a value?
Pedro Ballesteros MW
Yes, it has a value because many people—most people—pay more money for wines that are claiming terroir. And we have always to keep in mind that wine is not a medicine. That wine is not energy. Wine is something that most people drink because of the pleasure of wine and because we have a lot of imagination. We like to talk about wine as we are talking now and we enjoy those things. So it’s not important to be very scientific, and it’s important to have a lot of imagery and a lot of fantastic things around wine.
And terroir is a very good thing because it is not precisely defined but is something that is advocating a kind of sense of place, sense of quality, of difference. We don’t know exactly how this works and we don’t know exactly if it’s true, but we like it.
Terroir is a very good thing because it is not precisely defined but is something that is advocating a kind of sense of place, sense of quality, of difference. We don’t know exactly how this works and we don’t know exactly if it’s true, but we like it.
Pedro Ballesteros MW
ARENI
My other question was: “What’s your definition of fine wine?” I wonder if it’s the same thing. We don’t really know what it is, but it doesn’t matter, because it’s magical.
Pedro Ballesteros MW
I tend to say that what we have in a bottle is a promise. All the promises that are in the bottle, they become ‘wine’ once the wine has been destroyed, and the molecules are no longer there. They have been transformed into electrons, into memories. So fine wine is something that is creating something in your memory, that is likely to be shared with other people. But fine wine is a concept for me. Of course you need a lot of things to produce fine wine and a lot of work, a place. But it is what you keep in your memory and how you share your memory with other people.
ARENI
You have studied the impact of cities and markets on the success of historical wine regions. Can you give us examples of fine wine producing regions that have succeeded because of their links with their markets? And at the reverse, examples of regions that would have had a big potential but at the time didn’t have markets to support them?
Pedro Ballesteros MW
Yes, I would prefer to do it in the reverse because if I do on the positive, people will think that this is obvious, right? Bordeaux is well connected, obviously, Tuscany is well connected. You mentioned Rioja before the train. Rioja is not the only region that was born because of two things: the transfer of know-how from Bordeaux, and the train that was taking wine in good condition to the people who drink it.
In Buenos Aires until the very early 20th century, most people used to drink Spanish wine, the Carlon wine that was coming from Catalonia and the Levante. And this trade stopped the moment that the train line between Mendoza and Buenos Aires was open.
ARENI
What would Napa be without San Francisco in its backyard? And when people ask me what they should do to replicate Napa, I ask: “Well, do you have the consumers first?” You need that consumer base that can pay $800 for a Cabernet, right? The Languedoc region in France is a very good example of a region that has potential, but which has historically lagged behind because they didn’t have access to the train or access to the big markets with big money.
Pedro Ballesteros MW
It’s interesting that many of the top wines of Languedoc are produced by foreigners with a lot of money. That is because they have the capacity; they have a good network of contacts.
ARENI
According to Liv-ex, to be successful in the secondary market, you need three things. You need a hierarchy s that clearly explains to the buyers why you are paying £10 for one wine, but £100 for another within the same wine region. Then you need a history of consistency in producing quality. And also—and that’s the interesting point for our conversation—Liv-ex considers that you need an export market, because local markets are never going to consider the local production as exceptional. Would you agree with that?
Pedro Ballesteros MW
I agree with the point of hierarchy. I want to highlight that there are three ways of getting the hierarchy. One is the modern way, by the prescriptions that are giving points etc. There is a classic way, the Bordeaux way with the courtiers, giving much more precise information—a range of prices. And the third element is the hierarchy among land owners, right? That is the typical model of Burgundy.
But the second point, I disagree. The long history is absolutely unnecessary today. Some of the most precious wines in today’s markets don’t have a long history. And some of the wines that claim a long history—this is a metaphysical claim. In the way they are being made, they are very different to the former wines. The 1990s was when Peter Sisseck made his Pingus and it was a big thing from the beginning. Or Opus One. They were wines that were made in order to be great.
And the reach of local and global markets; I think this is a definition that doesn’t work any longer. In the past it was true, because the production areas were getting a lot of value by exporting the wines to countries in which wine was not produced. So it was a luxury.
The new thing now is that there are regions that are similarly rich and are producing wine. So the local markets in this case are crucial. I can give you two examples. One is California and the other is China. What the Chinese are doing is crazy. They are investing a lot of money. They’re making all possible efforts to present those wines that are fine wines. They’re succeeding on this. But they don’t have any interest in exporting these wines. They are wines for the local market because the local market is extremely rich.
Of course, if you are producing wine in a mid-size or small-size country that is not particularly rich, export markets are the only way of getting value.
ARENI
Do you still need the export market to give you the status of fine wine?
Pedro Ballesteros MW
The opinion of foreign people is always crucial. Even in the cases mentioned before, California changed completely after the Paris judgement in 1976. But until Covid, [the Chinese] were inviting everybody to go to Ningxia and to evaluate their wines in order to have non-Chinese people saying their wines were good. So you always need this kind of thing. Even some producers in Burgundy, that in principle wouldn’t need this kind of recognition, are looking for it.
The opinion of foreign people is always crucial. […] Even some producers in Burgundy, that in principle wouldn’t need this kind of recognition, are looking for it.
Pedro Ballesteros MW
ARENI
Can a wine be fine without local support as well? Because many people have tried to create trophy wine specifically for export markets without ever worrying about the local market. Do you need local recognition as well?
Pedro Ballesteros MW
Well, I think this is a very personal definition, but I think that fine wine has to go together with values. A fine wine that is not taking care of, or contributing to, some community cannot be fine. It has no values.
When I go to Haro in Rioja, I like to go to a normal bar. One of the things I enjoy most there is that I can order a wine from López de Heredia that the bar has by the glass and it’s not very expensive. But this is part of what Maria Jose is doing in relation to her local community. And I think this is great. Something that you cannot do in any other place on earth.
ARENI
Are there still examples where the market itself has shaped a particular style of wine in terms of taste and structure?
Pedro Ballesteros MW
I don’t have a single example of a fine wine that has not been shaped by the market.
Many people mention Parker, but I think it’s not so important as the change in taste from sweet wines to dry wines. Some centuries ago, the most expensive wines on earth were coming from Greece. But then the Ottoman Empire expelled vines and then Sherry took over. Sherry is great, but the raison d’etre is they were taking over producing a very particular type of wine for a very particular type of market, that does not exist any longer. This is the drama. We adore those wines, but we drink very little of them. There is some mismatch between intellectual admiration and physical consumption.
And this is the case now with natural wine. This is a wine that is created upon an ideological principle that is made by people following their way of thinking. They can say that it is shaped by going back to the origins of humankind, that they are respecting the environment, whatever, but it’s shaped by a particular market.
The history of the greatest wines has been a history of exports, and not necessarily of countries that were winning war. The best example is Burgundy. They were losing wars and they were playing with a lot of different powers, including France. And they were using the wine as an element of diplomacy.
The best example today is the case of Chile. Chile is negotiating, all over the world, Free Trade Agreements, in which wine is a priority. No other country is doing this. And this, I think, is part of their success. For these kinds of things, you need a reputation. You need to feel that you’re drinking something that is important because it is produced by important people in important places.
ARENI
What constitutes the international reference for quality at the moment is still very much led by an Old World vision of the wine, and notably a French vision of the world. Do you see this changing? We’ve seen the New World doing fantastic things. Do you think they have reached a stage of maturity where they can impose their own definition of excellence?
Pedro Ballesteros MW
It’s a complex question. First, France is not a rock. France has changed because of the New World influence, as much as the others have followed some of the French initiatives. If you look at Bordeaux now, it has very little to do with Bordeaux 70 years ago. If you look at the new regions in France, for instance Languedoc, it’s a very clear example of a New World style in an Old World country.
Second, the classifications that are implemented in France, they [existed] even before, in Porto, in Tuscany with Chianti, in Galicia.
Germany used to have a very good system before the laws in the 1960s and ‘70s that were not so positive. And at the beginning of this recent history, some countries in the New World—mostly the US—were criticising the classification system because of one single and very obvious reason: they were not in a position to have a classification system. Now they have more American Viticultural Areas than there are appellations in Portugal and Spain together. And now they are the kings of prescription.
So I wouldn’t say it’s a French approach. It’s an approach that was applied in France because for historical reasons, France had a very good advantage over other wine producing countries and they were protecting this. Some years ago, the New World countries—mostly the US—were against the appellation system because they didn’t have the necessary background for this. But now they have it, they are creating a lot of American Viticultural Areas and they are speaking about history. Now, they have something very valuable to protect.
The basic rationale for this is always the same: I have a product that has a value and I need to protect this product from anybody that is trying to copy. And I need to create value in my own land. I know that somebody else is going to be able to produce wines of a similar quality to mine in other places, so I need to protect the only thing that nobody can steal from me—the origin.
The basic rationale for this is always the same: I have a product that has a value and I need to protect this product from anybody that is trying to copy. And I need to create value in my own land. I know that somebody else is going to be able to produce wines of a similar quality to mine in other places, so I need to protect the only thing that nobody can steal from me—the origin.
Pedro Ballesteros MW
ARENI
We’ve been talking about how markets have influenced the making of terroir. But are we talking about trade members or are we talking about the consumers?
Pedro Ballesteros MW
In the past, everything was managed by the trade. In the second half of the 20th century, this figure [appeared] that is somebody who is not, or who should not be involved in trade, and that he’s living out of writing notes, tasting notes and giving points. And this was a completely new thing. And I think it’s been positive. We give more information to the customers.
The important thing is in which market segment you are working. For me it’s impossible to speak about wine in general.
There are a lot of new wines that are bringing completely new things to the market. For me, the most relevant category now are the ideological wines; wines that present a number of values. A certain approach to nature, or to the way of making wines. And those wines are approaching people with a high cultural level, with some money. And this is creating new things. I think that the case of Liber Pater in Bordeaux is quite exemplary of this. These guys are not speaking of history, are not speaking about prestige. They’re speaking about planting, and grafting vines, about field blends, about many natural values. They are selling the wines at prices that are much higher than Lafite Rothschild.
ARENI
Can you tell us a bit more about why the courtier plays such a crucial role in fine wine?
Pedro Ballesteros MW
A courtier is a prescriptor that gives much more precise information than any prescriptor. We taste wines and we say 92 points or 16 and then we write a very nice tasting note and, and we even anticipate how many years this wine is going to be kept. Courtiers say “this is the price” and price is something that contains all information and it’s putting together buyers and sellers. The courtier was the most critical element for the 1855 Classification, because they were looking mostly at prices.
ARENI
So when we talk about La Place de Bordeaux opening up, everybody thinks about the negociants, but what it means on a practical level is that it’s also opening up to the network of courtiers that have that expertise in price.
Pedro Ballesteros MW
I tend to think that the former success of Bordeaux was very much owed to La Place de Bordeaux because in the past they used to produce wines that were better in Bergerac or the internal area of Bordeaux, but they selected this area because it was an easy access to the market. And I think that the genius part of this new role of La Place de Bordeaux is that they have realised that they don’t have any kind of constraint on the origin of the wine. They can use their network of contacts for any wine. La Place de Bordeaux is doing very well because they are dealing with top wines from all over the world. It’s very precise information. I think it is going to be a big success.
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