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War, Wine and Chaos: An Industry Insider Reflection

War, Wine and Chaos: An Industry Insider Reflection | The Latest | RedThumb Natural Wines

The great unknown[s]

A famous American war criminal once stumbled over a brilliant bit of logic. He was asked about intelligence failures in the run up to an invasion, and he mused about an information paradox.  I’m paraphrasing here, as directly quoting warmongers in a wine blog could be considered gauche, but in a nutshell: 

There are known knowns, there are known unknowns, and there are unknown unknowns. 

That last one, the things you don’t know that you don’t know – that’s what can really trip you up. Fortunately the stakes here are a little lower than military occupation.

We’re now about five years into running RedThumb Natural Wines, slowly turning some of the unknowns into knowns. Let’s address three unexpected aspects of the industry that we now know are inevitable [and knowing is half the battle, amirite?].

Moving at the speed of wine

If you get into the wine business, you have to first love wine, and second, welcome a lifestyle with wine at the center. It’s certainly what attracted me to the industry. There’s a camaraderie among wine professionals; all the more so because most of us are here for similar reasons. We love the long dinners when we share bottles that inspire us, the trips to vineyards, the tastings in cellars. Really, we’re here for any opportunity to talk with other wine lovers about our passion. 

Unfortunately, there’s a flip side to the shared lifestyle. A common trait among wine folks is, well, let’s just call it an extreme preference towards a positive work/life balance. At what point during a four-hour dinner have we reached the point of diminishing returns, for example. Couple this predilection with the need for cooperation from notoriously inefficient US government agencies and European winemakers, whose abundance of bank holidays and long summer breaks are rivaled only by American school childrens’ [though not their parents’], and you have the perfect recipe for an industry that doesn’t know the meaning of the word “deadline.” 

On top of that, large retailers make decisions on what they’ll carry months in advance of bringing in the wines. The work we do today may not pay sales dividends for a year or more. As a small, bootstrapped company competing against some very large, very well-funded conglomerates [even Pernod Ricard’s insatiable need to acquire only puts it number eight on this list], the molasses-like speed of the wine business has required some mental adjustments. 

Accepting the natural pace of the process is a must. This is a relationship business, and trying to force matters while building trust is annoying at best, detrimental at worst. As the winemaker must patiently wait until grapes are ready for harvest, so must we let certain things ripen on the vine organically.  

The wine industry is a small world, after all

A butterfly flaps its wings and causes a tornado half-way around the world. 

We’ve all heard this chaos theory allegory, but there are some real truths in there as it relates to global industries. From trade embargos to foreign disputes to full-fledged wars overseas, international incidents increasingly impact the way we do business in a very real way.

In 2022, our supply of Tempranillo, our top-selling wine, was getting perilously low. Production in Spain was delayed, and we eventually ran out of product, something that can be devastating to a growing brand. It was maddening: the wine was in tank, the labels printed, the cartons ready to go – so what was the problem?  

The issue can be traced back to Kiev, Ukraine, where one of Europe’s largest suppliers of glass houses their production. In the first days of the Russian invasion, the factory was shut down and molten glass hardened inside the machines. The resulting ripple through the glass bottle supply chain meant our producer was stuck on a growing waitlist for bottles. Our late July bottling became early November, and just like that, our best-selling wine was out of stock for the holiday season. 

Geopolitical events are a bit beyond our area of expertise, but the takeaway is that wine, like most industries today, is truly global in scope. Seemingly unrelated incidents are often connected, and their impacts on our business go well beyond annual crop reports or whether Gen Z will ever drink wine. The lesson is to stay nimble enough to allow room for the unexpected to happen.

When preparation meets opportunity 

Alcohol is a tightly regulated industry [as I’ve written about before]. Regulations can be a moving target, with new guidelines and requirements popping up each year. The National Organic Program [NOP], the framework that enforces the credibility of the USDA organic seal, recently enacted the Strengthening Organic Enforcement Rule. Effective March 2024, the law expands certification requirements and tightens standards for all food and drinks labeled “organic” in order to ensure integrity in the organic food supply chain. A number of organic wines have already been taken off the shelves until proper certifications are procured.

Fortunately for us, regulatory changes fall in the “known unknown” category. We can’t predict what the changes will be, or when they’re coming, but we’ve positioned ourselves to be ready. It’s an area we identified from the beginning as a potential blind spot, so we partnered with USA Wine West, experts in navigating ever-changing state and federal regulations. Having knowledgeable, forward-facing people in our corner is invaluable. Without that added experience, the head-spinning impact of a new rule or law, especially when the interpretation and enforcement can feel completely arbitrary, can cripple an unprepared business. 

New ventures like RedThumb face growing pains. When prepared, we can avoid the pitfalls we see coming. The tough part is learning to expect the unexpected. After that? We might need some luck. English poet and rabble-rouser John Milton observed: 

Luck is the residue of design. 

If he’s right, I like our chances.