The Drivers of Wine Regionality

CHRIS EASINGWOOD, LARRY LOCKSHIN and ANTHONY SPAWTON

Original manuscript received, 20 August 2010

Revised manuscript received, 15 October 2010

ABSTRACT Regionality is the reputation a wine region has for producing wines with a particular

style. In a world of over supply, its importance is recognised, but the causes or drivers of regionality

have not been researched. This research explored the bases of regionality, first of all in discussions

with 20 specialists in Australia, followed then by a survey of 89 wine professionals on the possible

drivers of regionality in leading wine regions in Australia. This identified 14 potential drivers of

regionality and a discriminant analysis showed the three key drivers to be: specialisation, muchdiscussed by opinion formers, and a well-defined wine style.

Introduction

The subject of this research is regionality, the reputation a wine region has for producingwines with a recognised and appreciated style. It is most associated with ‘Old World’wine regions such as Chablis and Rioja and others, which have established reputationsfor their particular styles of wine. In contrast this is much less common in the NewWorld where, for instance, Australia initially concentrated on developing bold, fruit-forward wines that sold increasingly well in overseas markets such as the UK. Butthe New World is changing direction and, for instance, Australia is now seeking toestablish itself as a country known for its pronounced regional wine styles, in otherwords known for its regionality (Australian Wine and Brandy Corporation, 2007).Australia needs its ‘Regional Heroes’, in other words ‘‘wines from somewhere ratherthan wines from anywhere’’.The importance of regionality, the need for the creation of strong regional brands, is

widely accepted as the basic ingredient for the development of brand salience (Perroutyet al., 2006; Remaud and Lockshin, 2009), for small producers wishing to present acooperative perception of quality attributes unique to those of competing regionsboth locally and internationally. To this end there is a now a plethora of GIs(geographic indications)/AOCs/DOCs/AVAs in both the New and Old World inan effort to emulate the reputations that have developed over time for France’sleading wine producing areas such as Bordeaux, Burgundy, the Rhone and Chablis.Produce a syrah and how does it compare to those of the Northern Rhone? Produce

Chris Easingwood, Professor of Marketing,Manchester Business School, Booth Street West, Manchester M156PB, UK (E-mail: c.easingwood@mbs.ac.uk)

Journal of Wine Research, 2011, Vol. 22, No. 1,pp. 19–33

ISSN 0957-1264 print/ISSN 1469-9672 online/11/010019-15 # 2011 Taylor & FrancisDOI: 10.1080/09571264.2011.550759

a chardonnay and is it more like a Chablis than a Burgundy? Which region is thequality benchmark? Where individual terroir can produce unique characteristics,which are desirable and non-transferable to the other regions in the world that havechosen to specialise in the same grape variety (Charters, 2006)? Or is it a ‘me too’?Perhaps it is not the utilitarian attributes that really matter to the consumer butthose hedonic attributes of status and luxury achieved by scarcity marketing with per-ceived quality helped by the use of a pricing structure more akin to that of the luxurygoods market than that of an agricultural product. Furthermore, the nuances ofclimate may be compensated for by annualised vintages, peer reviewed and re-launched and often accompanied by great ceremony all designed to consolidate theintrinsic attributes of that particular vintage and to continuously reinforce and perpe-tuate the perceived quality of previous and future vintages from this particular region.

Yet what lies behind the utilitarian and hedonic reputations of these great wineregions and others elsewhere in the world has not been addressed in the academicliterature. Where work has been undertaken it focuses on the legal regional entityand the basis for protection of the intellectual property of the region to include itsbrands and trademarks. Within the regions in the EU there are strict guidelines onthe methods and processes that can be employed within all areas of viticulture andwinemaking, with non-compliance resulting in possible expulsion and loss of certifica-tion. As a result the attributes that create regionality have not been addressed beyondthe legal arguments of where the regional brand name has, due to lack of legal protec-tion, become a generic name for a wine style (as was the case with sherry) or of where asemi-generic became associated with another region elsewhere (as was the case withCalifornian ‘champagne’).

In earlier times, wine was sold locally (Spawton, 2010) and as a result brand loyaltywas high. As the hedonic virtue of wine consumption grew locally and internationallythe export of the ‘best wines’ provided both status and pleasure in emerging consumermarkets, aided by scarcity marketing to ensure that demand far outstripped supply,thus escalating the ‘perceived value’ of the regions as a result. This premium positionin France, for example, was reinforced annually where prices were set based onthe vintage, but not so low as to destroy the investment value of previous vintages(non-vintage was devised in Champagne to ensure that income to producers was main-tained). So much was the status of the denomination of origin developed, that luxurypricing was successfully used to ensure that the limited quantities available werereserved for those buyers who could afford them. These designated chateaux stillenjoy this price/quality advantage to the present day (Spawton, 2010).

If this is a topic that has been neglected by the academic literature, its considerableimportance to the wine industry needs to be fully recognised. The role of regionality asa buffer against the commoditisation of wine is not understood and the plethora ofregional identities without the key ingredients of uniqueness and relevance to the con-sumer is not helpful. The growth of ‘clean skins’1 in Australia for example, whereunlabelled wines are sold using regional designations as identifiers of quality, is a prac-tice, which will in the long term be damaging to the concept of regionality in Australiagenerally as many of the wines sold in this way have intrinsic qualities that are too poorto be representative of a region’s intrinsic quality.

Regionality prospers where there is uniqueness and scarcity and where there hasbeen concerted effort to create perceived quality over time. There is no substitute forthe apprenticeship of being able to deliver utilitarian attributes, supported by peerreview (including show medals and awards) to attest to this consistency of excellenceof a region in Australia or elsewhere.

20 CHRIS EASINGWOOD ET AL.

More than half of the world’s wine is now sold through supermarkets (Euromonitor,2008) thus making it an FMCG (fast moving consumer good) and in Europeanmarketsthis proportion is closer to 70% by volume (Euromonitor, 2008). Therefore, wineregions without regionality will increasingly be forced to compete on price, not anattractive proposition given that there is an ongoing excess of supply of wine overthe demand for wine looked at worldwide. Even the Riverland, Australia’s volume pro-ducing region, is finding it hard to compete on price alone given the high cost and scar-city of both labour and water (Jukes, 2007). This means that the New World isincreasingly looking to regionality to protect and promote its wine producingregions. Australia, New Zealand, the US, Chile, and Argentina have all decidedthat stronger reputations for wine regions is the direction to take, with only SouthAfrica deciding not, concluding that its overseas markets will not be able to recogniseStellenbosch, for instance (Harpers, 2008).It is not just the New World that is examining its regionality, but the Old World too

recognises that whilst a few of its most famous wine regions have achieved some recog-nition of what they stand for, most have not. There are just too many wine regions withtoo many different propositions for recognition to be achieved except perhaps locally.Italy for instance has over 300 DOCs. Ironically, as parts of the New World puzzleabout how to take more regionality on board, the Old World is considering how itmight back off. The strict Appellation d’Origine Controlee (AOC) type-systems inthe Old World are thought to be too restrictive. Some members of the French andSpanish wine industry are wondering if they have embraced the concepts of regionalityand terroir too passionately. For instance, with sales under pressure at home andabroad, serious consideration is given in France to a relaxation of the AOC rules toallow individual producers the choice of either staying within the existing stringentAOC rules, or taking a new option for greater winemaking and labelling flexibilitywithin less stringent rules, yet to be defined (Joy, 2004; Gibb, 2007a). This positionis now being adopted across the EU as the loss of market share bites even in some ofthe most prestigious regions. Brian Croser summarised the Old World/New Worlddifferences on regionality when he commented that whilst France may have toomuch regionality, Australia almost certainly has too little (Croser, 2004).Thus, regionality is highly important to the wine industry but its determination has

been neglected in the academic literature. Its basis, namely what creates regionality,has hardly been addressed. This article seeks to address this deficiency: to identifythe variables that deliver regionality, namely the ‘drivers’ of regionality.

Literature

Regionality is defined as the reputation a wine region2 has for producing wines with aparticular style, for example:

. Chablis and its bone-dry, minerally, highly acidic white wines

. Rioja and its velvety reds with sweet vanilla oak

. Mosel-Saar-Ruwer and its elegant, crisp, complex whites

Regionality can be of economic value: ‘‘How much would it cost to build somethinglike Beaujolais today for a new wine region?’’ (Duboeuf, 2004). Well, quite a lot, and itwould take quite a long time, and success would not be guaranteed.The importance of regionality or wine region identity, or wine region brand equity, lies

in its role in influencing consumer choice of wine. In one study, region of origin ranked

THE DRIVERS OF WINE REGIONALITY 21

third behind grape and personal recommendations in importance for consumers choos-ing wine in retail outlets in Australia, but even higher when respondents recognisedthat region and grape are, in many cases, composite constructs, in the sense that con-sumers use both simultaneously as quality indicators such as Hunter Semillon (Bruwerand House, 2003; Perrouty et al., 2006). A qualitative study, also in Australia, foundregion of origin ranked third in importance (Hall et al., 2001). It is possible that theregionality dimensions of a wine producing country have more resonance in thatsame country than in export markets simply because consumers can be expected tobe more aware of regional factors in their own country. Thus, the Hunter Valley isseeking to divide itself into five sub-regions but only for the Australian market notfor overseas (Gibb, 2008). Certainly it has been found that the valuation of Frenchwines with geographical appellation in the UK is quite low (Steiner, 2004).

Awareness of wine regions is assiduously researched by wine marketers, for example,the Australian Wine Bureau questions 60,000 consumers a year (Howland, 2002), yet,as mentioned, the causes or drivers of regionality have not been addressed. One studyfocussed strictly on the local factors (e.g. friendly people, good restaurants, proximity tothe city) that can help make a region an attractive local destination but not on thedrivers of regionality (Bruwer and House, 2003).

When the reputation of a wine region is researched it is often its effect on price that isexamined. Thus it has been found that region, alongwith other variables (grape variety,cellaring potential) do affect price (Oczkowski, 1994) and that the effect of region can beas high as +31% on price commanded (Wade, 1999). Others have examined the effectof the reputations of regions in one country on the market place in another (Davis andAhmadi-Esfahani, 2005). Whereas big brands from big companies may succeed inde-pendently of regional identity, smaller wineries aremore likely to align their brand iden-tities with those of their wine regions (Bruwer and House, 2003). In France regionalidentity is protected by highly detailed Appellation d’Origine Controlee regulations.Regional identity is just one tier that sits within the other branding layers of country,producer and grape, surely one of the more complex branding equations to be foundin anymarket?Oneway to reduce this complexity is to combine the regionwith a ‘spear-head’ grape, as with marlborough and sauvignon blanc (Beckett, 2003).

Regionality should not be confused with terroir. Terroir, ‘a sense of place’ or ‘some-whereness’, is the effect of the particular physical characteristics of a location (soil, waterretention, topography) together with its climate, the grape variety used and of the roleplayed byman on the quality and the uniqueness of the wine produced, and is essentiallya local concept, in other words is specific to an individual site (Joy, 2007). Thus, poten-tially, each site has a unique terroir, and this is why a single winery may have severaldifferent terroirs on its property and grow different grapes and produce wines of differentstyles and quality. The scope of regionality is, as its name suggests, much wider,representing an entire wine growing area and implies something quite different,namely the wine region’s reputation, not its soil/water retention properties. For areview of terroir, see Joy (2007) and for a geologist’s perspective, see Wilson (1998;also Moran, 2001). Some writers argue terroir should be interpreted as a naturalphenomenon, unaffected by human intervention (Robinson, 1999) whilst mostinclude cultural factors such as viticultural and vinification practices (Bohmrich, 2006).

Methodology

The topic of regionality was explored in three main stages. The first stage involvedexamining the literature for regionality drivers. Given that regionality is a matter of

22 CHRIS EASINGWOOD ET AL.

reputation and branding, this literature was examined first for possible insights (Aaker,1997; Kapferer, 1997; Keller, 2001, 2003) as was the literature on brand equity cre-ation (Keller, 2003; Ambler and Barwise, 1998; Rust et al., 2004; Ambler andRoberts, 2008). An alternative source is the country-of-origin literature (Johanssonet al., 1985; Johansson and Nebenzahl, 1986). But these proved unyielding as thefactors identified in these literatures are too generic to be of value for this application.Given that a wine regionality construct is to be derived, it may be that wine-specific

sources are more useful. Hence the wine marketing literature was looked at, butwithout success as the topic of the drivers of regionality has barely been addressed,even though the creation of strong regional brands is one of the more pressingchallenges faced by the wine industry worldwide.So recourse was made to the wine literature, as opposed to the wine marketing litera-

ture. Three Old World regions were chosen that a) exhibit regionality at least to somedegree and b) are drawn from three different countries:

. Chablis (France)

. Rioja (Spain)

. Mosel-Saar-Ruwer (Germany)

Three authoritative general texts (Johnson and Robinson, 2001; Stevenson, 2001;Robinson, 1999), as well as some specific sources (i.e. Blanning, 2003; Radford,2002; Schoonmaker and Sichel, 1983; Payne, 2004) were consulted and the factorsthat repeatedly crop up when describing each of the three selected regions’ uniquereputations were abstracted. Not that even these texts explicitly address the subjectof regionality. But what they do is discuss topics such as terroir and distinctive wine

styles and wine quality along with others and explain how these factors have helpedcreate the unique reputations that the three wine regions enjoy.The following two stages involved refining and testing the factors identified in the

first stage and were carried out in Australia, a wine producing country with a largenumber of very different wine regions and an interest in understanding and developingits regionality.The purpose of the second stage of the investigation was to expose the factors ident-

ified in the first stage to critical scrutiny. A number of prominent Australian wineprofessionals from across most of Australia’s leading wine regions were identified andinterviewed in face-to-face meetings lasting about an hour, sometimes longer.3 In all,30 interviews were held mainly with the chair persons of local regional wine producers(18), also with prominent wine growers (eight) and with executive officers responsiblefor promoting wine tourism and/or the link between wine tourism and general tourism(four). Establishing a regional wine identity was high on the list of priorities for each ofthese people. Consequently those contacted were enthusiastic to be involved, and take-up was above 90%.The purpose of these face-to-face meetings in stage two was to subject the initial list of

regionality drivers drawn from the wine literature, to critical examination, to stimulatediscussion of the topic of regional identity, and possibly to generate additional driversnot identified at the first stage. The analysis of the wine literature had produced apreliminary list of possible drivers of regional identity which was further refined inthe face-to-face discussions, producing a final list of 14 possible drivers of regionality.Given this process, the drivers already had some validity, but were further validated

by asking a larger number of interested wine professionals to complete a survey on thetopic of regionality. This was the third and final stage of the investigation designed to

THE DRIVERS OF WINE REGIONALITY 23

provide some quantitative evidence on this list of drivers and the relevance of each.A survey to investigate the topic of regional identity was designed and the support ofthe regional wine association chairs was enlisted, who distributed the surveys to wineowners in their respective wine regions who were known to be interested in and wellinformed on the topic of regional identity.

Winegrowers from 89 of Australia’s leading wineries drawn from across the country(from South Australia, Victoria, NSW and Western Australia) agreed to participateby answering questions on their estimates of wine regions’ regionality, and their esti-mates of how well a number of wine regions scored on the possible drivers of regionality.In particular, respondents were asked to estimate, in their opinions, the regionality of 30different Australianwine regions. The regions were chosen as themost likely examples ofregionality based on research identifying the best-known Australian wine regions(Romaniuk et al., 2003). For each of the 30 wine regions, the 89 respondents wereasked to respond to the following: “Regionality describes the reputation an areaenjoys for a particular style of wine. Please rate each wine region on regionality from1, possessing little or no regionality, to 7, possessing very high regionality.”

Second, respondents were asked to provide estimates of the drivers. Now it would bea virtually impossible task to rate all 30 regions on each of the 14 drivers, so instead therespondents were asked to provide estimates for each of the possible drivers of region-ality for a small but rotating number (five) of these wine regions.4

For instance, one possible driver is specialisation, and so respondents were asked to rateeach of the five selected wine regions on the statement, ‘‘the region specialises in the winestyle’’ using a 1–5 scale, from 1, very much disagree with the statement as it applies tothe wine region to 5, very much agree with the statement as it applies to the wine region.

Another possible driver is volume production, and for this driver, respondents wereasked to rate each of the five selected wine regions on the statement, ‘‘significantamounts of wine are produced in the wine region’’. The list of the drivers of regionalitytested in this research is given in Table 1.

In this way a sample size of 89 was obtained to rate the regionality of 30 Australianwine regions. At the same time a sample size of 445 (89 x 5) was provided to estimatethe level for each of the drivers of regionality for each region. The results obtained canbe said to be representative of informed and interested Australian wine professionals.

The sample was then split into groups. All the cases for each individual wine regionin which the regionality rating was 6 or 7 on the 1–7 regionality scale were placed inthe ‘High Regionality’ group. All cases in which the regionality rating was 1–4 on theregionality scale were placed in the ‘Low Regionality’ group. Those regions given a 5(the modal score) were not rated high or low and omitted from the analysis. Then theaverage rating given for each of the possible drivers in the high and low regionalitygroups were compared, and tested for significant differences (Table 1). Thus, wehave a comparison between regions given a high regionality rating by the 89 respon-dents with those regions to which they gave a low rating on each of the 14 drivers.

A significant question is whether a reduced set of variables may adequately discrimi-nate between regions with high regionality and regions with low regionality. Some ofthe terms employed by the professional writers and interviewees in stage two may besimilar across some of the 14 dimensions, leading to a degree of collinearity betweenthe fourteen drivers of regionality. In which case, a subset of the fourteen variablesmight discriminate between high and low regionality. To test this, a discriminantanalysis of the drivers was performed starting with all 14 drivers, but resulting in adiscriminant function with only three items and a significant standardized canonicaldiscriminant function.

24 CHRIS EASINGWOOD ET AL.

Results

Discriminating between High and Low Regionality

The ratings of all 14 of the drivers are found to be significantly higher for those regionsgiven a high regionality rating by the respondents than for those regions given a lowregionality rating by the respondents. This is taken as support for the drivers, whichdo indeed appear to discriminate between the wine regions estimated to have strongregional identity and those estimated to have, relatively speaking, low levels of regionalidentity. This is particularly so as all 30 regions were chosen because they were thoughtto include Australia’s best examples of regionality and so in effect the drivers werediscriminating between regions with high regionality and regions with medium region-ality not between regions with and without regionality, which would have been a muchless demanding task.

Table 1. Comparing regions rated high on regionality with regions ratedlower on regionality.

Mean: high regionality

group (n ¼ 114–122)

Mean: low regionality

group (n ¼ 135–143) Differencea

Specialisation:- The region specialises in a wine style 4.51 2.89 1.62∗∗∗

- Only one or two other notable winestyles are made in the region

3.67 3.24 0.43∗∗∗

Volume production:- Significant amounts are produced

3.84 2.96 0.88∗∗∗

Opinion formation:

- Well supported by the local and/orstate body

4.37 3.64 0.73∗∗∗

- Much discussed by opinion formers,

such as wine writers

4.29 2.78 1.51∗∗∗

Quality:

- The average quality level of the winestyle across the region is consistentlyhigh

3.83 2.94 0.89∗∗∗

- There are some highly ratedexamples of the particular wine style

4.61 3.55 1.06∗∗∗

- The wine style has potential forbottle-ageing

3.95 2.85 1.10∗∗∗

Heritage:

- The wine style has been produced forsome years

4.41 3.28 1.13∗∗∗

- The wine style has been wellregarded for some time

4.38 3.12 1.26∗∗∗

Distinctive:

- Has a well-defined taste profile 4.33 2.97 1.36∗∗∗

- The style of wine is distinctive 4.49 2.95 1.54∗∗∗

- Few other regions exist anywhere inthe world making a similar style ofwine

2.84 2.19 0.65∗∗∗

Terroir:† The region has a special ‘terroir’ that

makes the particular style of wine

possible

3.82 2.83 0.99∗∗∗

a Two-tailed test; ∗, ∗∗, ∗∗∗ significant at 5%, 1% and 0.1% respectively.

THE DRIVERS OF WINE REGIONALITY 25

The results are averages which mean that not all of the drivers occur for all wineregions having strong regionality profiles all of the time. A wine region with a strongregionality profile is likely to achieve its position by performing particularly well ona subset of the drivers. This unique subset will define its own unique position.Another region also with a strong regionality profile may achieve its position by per-forming well on a different subset of drivers. Details are now provided on each of the14 drivers in seven categories.

Specialisation

The region specialises in a wine style

The first factor is specialisation. It helps the region to focus on one wine style. If thewine region is to establish a strong regionality profile it helps to concentrate on oneor a small number of wine styles, as Chablis does with its unique style of chardonnay,making nothing else. In Australia, Rutherglen concentrates on its sweet, intensemuscats and tokays, whilst Macedon Ranges, a high altitude area in central Victoria,has a cool to very cool climate, and so specialises in sparkling wines made from under-ripe pinot noir and chardonnay.

But in general, specialisation is not seen as a strength forAustralianwine regions.ManyAustralian wine regions struggle to find a speciality, although it helps to be relativelysmall. Clare Valley with its riesling is perhaps an example. Some Australian regionschoose not to specialise. Yarra Valley for instance, which sees itself as a leading coolclimate wine region growing significant amounts of most grapes except perhaps riesling.

Only one or two other notable wine styles are made in the region

It helps recognition if only a limited number of different styles of wine are produced.Thus the Cote d’Or has its renowned pinots and chardonnays, and little else of impor-tance. But this is not the Australian way, which has evolved because of the historicimportance of cellar door sales.

The Australian-way, as one winery owner expressed it, has always been, at the indi-vidual producer level, “to produce grape A and also grapes X, Y and Z just in case thecustomer does not care for grape A”.

This does not help Australia in its efforts to build strong regional identities. The YarraValley, close toMelbourne, has around fourmillion visits each year from theMelbournearea, presumably looking for wines to taste and purchase, and wine makers there do notconsider it commercial sense to produce just one or two styles. So most styles are offered.

Even so some regions in Australia do manage to establish reputations for one or twostyles, Clare Valley for riesling and shiraz, the Hunter Valley for semillon and shirazes,for instance. Some of the newer regions may also chose to specialise so that a regionalidentity is established, as one local chairman put it:

Some of the relatively youngwine regions such as AdelaideHills andMorning-ton Peninsula are more likely to focus on a few styles because the newcomersare looking to take advice on which varieties will do the best and are alsolooking to do their bit in helping to create a particular regional identity.

Volume Production

Significant amounts are produced

To establish a reputation it can help to have a certain size, a certain criticalmass.Criticalmass helps recognition and delivers shelf space. This is part of the reason that the Barossaand the Hunter Valley have good recognition. According to one senior manager:

26 CHRIS EASINGWOOD ET AL.

Victoria has a problem in this regard. There are 22 wine regions registered inVictoria. So very few are going to have enough critical mass to make animpact anywhere except in Melbourne, their local market. When that brand-ing goes overseas it becomes virtually meaningless. Some of the regions are sosmall that they struggle to make an impact even locally.

Opinion Formation

A second factor to help gain recognition is to be talked about, to be the subject ofarticles, to be newsworthy. This has become increasingly important. Recognitionused to be based on longevity, but this is not the only factor anymore.

Well supported by the local and/or state bodyThis canbe a contentious issue inAustralia. Some top tierwine regions suchas theBarossainSouthAustralia are designated tourismregions aswell aswine regions andare thereforeentitled to a contribution of $500,000 upwards from the state to be used to market thewine region and thereby the state. Thus the Barossa message can be taken muchfurther afield and acts as the flagship for the state itself. In contrast, other wine regionsin South Australia such as McLaren Vale and Coonawarra are not designated tourismareas and rely on voluntary contributions to support their marketing spend.

Much discussed by opinion formers, such as wine writers

This was widely regarded to be of high importance. The logic is clear as one wine pro-ducer put it:

Step 1, produce quality wines. Step 2, get opinion formers to visit. Step 3, letthe opinion formers go forth and spread the word.

This is straightforward in principle at least. In Australia, it helps wine regions toattract journalists, especially overseas journalists, if the region has GI or geographicalindication status.

Quality

The average quality level of the wine style across the region is consistently high

High average quality is important for building regional identity, as has been claimedfor the Rhone: “If you took half a dozen bottles of Rhone wine off the shelf at youraverage supermarket, you would find there is much less variation than in Bordeauxor Burgundy. In short, the Rhone has developed an enviable record for consistency”(Williams, 2004). Bordeaux, in contrast, is sometimes said to have polarised inquality between the top end and the rest.The average quality of the wine within regions is seen as an Australian strength. This

is, in the opinion of many, probably as good as in any country (Jukes, 2007). Inaddition, there is ‘‘very little rubbish here’’ (Jukes, 2007: 32).

There are some highly rated examples of the particular wine style

The existence of some highly regarded wines can lift the reputation of the entire region,sometimes even when the average quality may not be so high. Burgundy is a goodexample. Its reputation is built on its superlative wines regardless of the quantities ofordinary wines that are also produced.The research shows this factor to be important in Australia where the quality of wine

in individual regions is thought to be on average good, so it takes some outstanding

THE DRIVERS OF WINE REGIONALITY 27

examples to lift the wine region’s reputation from a good but not particularly outstand-ing level into a higher category. For instance, Adelaide Hills gains recognition throughhaving seven producers rated five stars (Halliday, 2005), just as some regions benefitfrom individually recognised wine producers, Sunbury from Craiglee, Pyrenees fromDalwhinnie and Heathcote from Jasper Hill, for example. In addition, it is thehighly rated wines that win medals and gain recognition at the wine shows that area feature of the wine market in Australia.

The wine style has potential for bottle-ageing/is long-livedRegionality is easier to establish in regions whose wines can live for many years, such asBarossa shiraz, Coonawarra cabernet sauvignon, Clare Valley riesling orHunter Valleysemillon. The mechanism for this seems to be via the secondary or auction markets.Wines which benefit from ageing go to auction, command high prices and establishthe reputation for themselves as icons and the regions as producers of quality wines.

Heritage

The wine style has been produced for some years

Regionality is not so easily built overnight. When it derives from a region’s heritage itbecomes that much more secure and this is where a region such as the Barossa Valleyhas an advantage. It has been building its reputation over several decades, and thatmakes it hard to undermine.

The wine style has been well regarded for some time

It also helps if the style of wine by which the region is known has been well thought offor decades, Hunter semillon, for instance. This means that the reputation for the par-ticular style of wine is built up over a very lengthy period of time and, as well as makingit hard to undermine, it also makes it hard to copy.

Distinctive

Has a well-defined taste profile

Regional identity is greatly helped by having a style of wine that is distinctive andreadily appreciated. For instance, Meursault in Burgundy can “virtually claim thecopyright to a melted butter on toast style” (Rose, 2005), very helpful when it comesto building a reputation for a wine region.

This clearly can be important, although wine makers in Australia are free to producetheir own style of wine and are not under pressure to conform to a regional style, as mayhappen in the Old World, so this is not always one of Australia’s stronger points. Forinstance, it would be hard to point to a regional style for chardonnay. But on the otherhand, Margaret River cabernet sauvignon blends can claim to have a dry, elegant butslightly austere style that is well-defined for the region.

The style of wine is distinctive

It is important not only to have a clearly defined taste profile, but also for this profile tobe distinctive. For instance the “Chablis expression of chardonnay is unlike that of anyother region” (Joy, 2007). According to one winemaker:

Australia too has its examples of highly distinctive wines such as ClareValley’s limey rieslings and the Hunter Valley’s toasty semillons.

28 CHRIS EASINGWOOD ET AL.

Few other regions exist anywhere in the world making a similar style of wine

If having a distinctive style of wine that is consistently produced across the region helpsbuild regional identity, then it also helps if few other wine regions anywhere in theworld are doing something similar. This is akin to having exclusive brand property.Being the only notable regional producer just makes a stronger position likely. Thisis undoubtedly one of the harder criteria to meet, although Rutherglen with its fortifieddesert wines does as does the Hunter with its semillons.

Terroir

The region has a special ‘terroir’ that makes the particular style of wine possible

Finally, it also helps if the wine is a result of a particular terroir so that other regions willfind it hard to replicate the wine style. Australian examples include cabernet sauvignongrown on Coonawarra’s terra rossa, sauvignon blanc in Adelaide Hill’s cool climateand Bordeaux blendwines inMargaretRiver’s sand and gravel over claywith amaritimeclimate.Undoubtedly it is not always easy to find unique geology and climate thatmake aparticular style of wine possible anywhere in the world, but especially so in Australia.

Discriminating between High and Low Regionality

The next step was to test for a reduced set of items that may adequately and parsimo-niously discriminate between regions with high regionality and regions with lowregionality. To test this, a discriminant analysis of the drivers was performed startingwith all 14 drivers, but resulting in a discriminant function with just three items anda standardized canonical discriminant function:

0.663 ∗ specialises + 0.260 ∗ opinion formers + 0.329 ∗ well-defined tasteprofile

specialises: the region specialises in a wine styleopinion formers: much discussed by opinion formers such as wine writerswell-defined taste profile: has a well-defined taste profile.The strength of the function can be seen from its fit and classification statistics:

Wilks’s Lamda ¼ 0.485 and 88% of cases correctly classified.It appears that a wine region that specialises in one or a very limited number of wine

styles and has the conditions that enable it to offer a style of wine with a distinct tasteprofile and can then persuade opinion formers to take note, can expect to score well onregionality.Incidentally, the three drivers are the ones with the three highest differences in the

mean scores between high and low regionality regions and represent three of the sevenbroad categories of drivers, namely Specialisation, Opinion Formation and Distinctiveness.

It is interesting to observe that the profile described by these three variables fits thefine wine regions of the old world such as Chablis, Rioja and the Mosel which havechosen to specialise in a restricted number of wine styles each with a well-definedtaste profile. Furthermore, opinion formers have been telling the world about theseregions for as long as the world has been interested in fine wine, supported of courseby advertising and promotion.The value of the discriminant function is that it identifies the drivers that wine

regions need to focus on if they are to have a strong regionality profile. The firstitem to enter the discriminant function, and the one with the highest discriminatingpower, is specialisation. Wine regions in Australia have, as mentioned above, generallychosen not to pursue this option, for a number of possible reasons. One is the

THE DRIVERS OF WINE REGIONALITY 29

importance of cellar door sales in the typical Australian wine region where a varietyof styles can help produce a sale. Second, the pioneering spirit of Australian farmerswould have made them disinclined to take such direction, even if it was offered.Third, whereas France has decided over centuries which wine styles work particu-larly well in which wine regions, this history of trial and error is not as clear or asavailable in the New World wine regions. Even so some New World wine producingcountries such as Chile and Argentina, which are expanding their existing wineregions and opening up new wine regions, are increasingly taking this matching ofgrape to conditions into consideration, leading to specialisation. This has beenhelped by the fact that cellar door sales are less important in these countries andthat the expansion has been driven not by small farmers but by larger investorswith wine holdings elsewhere who are therefore looking to plant the grapes thatwill perform the best given the local conditions. Furthermore, they are looking fornational and international not local sales where a strong regionality profile willhelp sales, indeed may be essential. Specialisation would seem then to be theprudent commercial decision.

Along with specialisation comes the well-defined taste profile. Not only do theseregions specialise, but the way they make their wine, based on their terroir, producesan identifiable style. This taste profile can then be appreciated by wine writers andother knowledgeable buyers.

Opinion formation is the mechanism by which the specialised style gets known, com-municated by advertising, promotion and authoritative voices to the wider market.There are many wine regions, especially in Europe, but also in Eastern Europe andeven China and North America, which specialise in a particular grape or a fewgrapes well-suited to the conditions and have a well-defined style. However, if thesespecial grapes are not admired and then communicated by wine writers and themedia, consumers will not be aware of the particular region.

Summary and Conclusions

The topic of ‘regionality’ is high on the agenda for many wine producing countries, forwithout it, a wine region must compete on price, not easy to do given the excess ofsupply over demand that is characteristic of most years. Furthermore, wine regionsare likely to do a better job of establishing their own regionality when they understandits causes. Australia, for instance, is trying to build its ‘Regional Heroes’, namely winesthat reflect those successful combinations of ‘‘classic grape varieties with Australianwine regions’’ (AWBC, 2007: 14).

This paper has progressed our understanding of regionality in two ways. First, it hasidentified the drivers of regionality. Second, it has confirmed the relevance of thesedrivers by demonstrating that regions regarded as having high regionality have the fol-lowing characteristics when compared to regions with low regionality:

. Specialise in a wine style

. Produce significant amounts

. Discussed by opinion formers

. Produce quality wines and do so consistently and have some ‘stars’

. Have a wine heritage

. Produce distinctive wines not made elsewhere

. Produce a wine that is made possible by the region’s particular terroir.

30 CHRIS EASINGWOOD ET AL.

The fact that these factors do differentiate on average between those regions given ahigh rating by the respondents and those given a lower rating does support the prop-osition that these are indeed the drivers of regionality. So a wine regionality constructhas been created through examination of the literature and testing, first in discussionsand then through a survey.Given that the drivers identified here were based on an analysis of wine regions in

Germany, France and Spain and they were confirmed in Australia, we do havesome significant support for the drivers and their general relevance. The work is,however, exploratory. For instance, the research in Australia supported the importanceof the drivers of regionality but also suggested that there may be drivers specific to Aus-tralia, based on the focus on tourism and direct sales at the winery. Some adaptationsand additions, country by country, are likely to be needed.A further limitation is that of the possibility that the sample could be biased by

non-respondents or by the variable attitudes of the respondents. The size of thesample and the overall agreement between respondents provides some evidencethat these effects are not major impediments to the conclusions, but cannot be entirelyruled out.It is recognised that regionality exists in the Old World. Chablis’s regionality is such

that it has difficulty meeting demand (Harpers, 2007). But there is a growing appreci-ation of the regionality potential that exists in Australia (Jukes, 2007; Gibb, 2007b),although Australia paradoxically has not always helped the strength of its regionalitycase with its emphasis on brands before regions.As has been commented, ‘‘Make a shiraz, and any shiraz producer in the world can

steal your market. But if you make a Barossa shiraz, it’s yours and yours alone’’ (Lech-mere, 2004). This is true to the extent that the Barossa stands for something distinctiveand defendable. Hopefully this work can help in that direction, not just for the Barossabut also for wine regions around the world.

Notes

1. The clean skin is a well-established practice in France where producers only sell their wine viaa negociant and where direct sales to the retailer or the public were usually in bulk unlabelledand unbranded form. This was adopted in Australia and New Zealand during the currentsurplus in wine grape production where ‘semi-generic brand names’ such as Barossa Shirazhave begun to appear on otherwise unlabelled wine.

2. The definition of a wine region used is the one defined by the relevant governing body in acountry, such as the Institut National d’Origine Controlee (INAO) in France and the Austra-lian Wine and Brandy Corporation in Australia.

3. Regions included were: Barossa Valley, Clare Valley, McLaren Vale, Coonawarra, YarraValley, Mornington Peninsula, Pyrenees, Sunbury, Ballarat, Grampians, Margaret River,Pemberton, Mount Barker, Hunter Valley, Cowra, Orange, Mudgee.

4. This was part of a fairly lengthy questionnaire and the estimates of regionality and the esti-mates of the drivers were well separated in the questionnaire so as to minimise the likelihoodof cross-contamination between the two.

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