The untimely death of Karl Kaiser marks a pivotal moment in the Canadian grape and wine business. At 76, he was revered as an icon of the industry co-founding Inniskillin Wines along with Donald Ziraldo in 1975. The advent – and ascent -- of Icewine in Canada is attributed to this duo. Kaiser made it. Ziraldo marketed it.
As industry friends attended his memorial in Niagara-on-the-Lake in early December 2017, they were reminded of how far the Ontario cool-climate region has evolved – in its viticultural practices, its winemaking and its marketing as a destination for quality wine. No one knows the story better than Gerald Klose because he was at the side of these two pioneers decades ago.
“What a crazy idea we thought Icewine was,” recalls Klose, not believing that the ‘eiswein’ of Kaiser’s Austrian birthplace could be made in Canada. “We produced only 200 litres the first year.”
Klose witnessed the early failures of handpicking when it was too warm and breaking machine parts when it was too cold. Only when the farmers got to that sweet spot of picking grapes at minus 10°C to minus 12°C, did the process start to work.
“Then the machine harvester worked brilliantly with frozen grapes that rippled through the netting like marbles,” says Klose.
Today, Gerald Klose is director of viticulture, east for Arterra Wines Canada, responsible for 650 acres and liaising with 100 growers from all appellations. With 40 seasons of experience, he’s seen it all.
“We’ve had drought, hail, early frost, late frost, bitter winters,” says Klose. “No two summers are alike. For example, 2017 had a lot of rain so we were dealing with downy and powdery mildew and botrytis.”
The lineage of Arterra Wines Canada is a story in itself, descending from the Vincor – Constellation Brands era. A year ago, October 2016, the Ontario Teachers’ Pension Fund bought the Canadian operations of American-owned Constellation Brands.
Importantly, this is much more than a patriotic move to wave the red-and-white Canadian flag. The $1.03 billion investment signals a deep confidence in the business and growth opportunities of the domestic grape and wine industry. The acquisition included seven of the top 20 wine brands in Canada, including the well-known Inniskillin and Jackson-Triggs labels.
Secondly, the consolidation embraces a pan-Canadian vision, including many wineries in the southern stretch of the Okanagan Valley in British Columbia. This is diversification in the true sense because of the arid to semi-arid climate, varying terroir, aspects and elevations which produce award-winning red wines. Within a 30-minute drive, there can be a range of 1,100 to 1,600 growing degree days explains Troy Osborne, director of viticulture, west, also for Arterra Wines Canada.
“Land is finite in the Okanagan Valley and land prices are at an all-time high,” he says. “It was only two years ago that the valley was in over-supply whereas today, with the increased demand for Okanagan VQA, we are experiencing an increasingly short supply. Many growers and wineries are expanding vineyards to bridge this gap.”
Based in Oliver, British Columbia, he oversees 1,100 acres and works with 35 to 40 growers who are keenly in step with their terroir. Every block of grapes has an end destination before pruning begins. If the target is to produce a $30 bottle of Merlot, then the crop load is managed differently than if the target is a $12 Merlot.
With consolidation comes the capital to mechanize. Osborne says 85 per cent of his crops are machine harvested. That’s good news in an environment of increasing labour shortages. However, as owners of family estate wineries exit for well-earned retirements, there is a dearth of talent and skills to work at all levels of vineyards and wineries.
“The next pinch will be finding qualified vineyard staff,” predicts Osborne. “We need vineyard managers and technical specialists.”
While Canada’s 700 wineries need skilled talent, they also need new consumers. It’s a surprising fact that of all Canadian sales of wines, only 32 per cent are of domestic origin. No matter where wineries are rooted in Canada, they need to expand the domestic market, and that often means beyond provincial borders.
As John Peller – of Peller Estates fame -- recently wrote in the Globe and Mail, only British Columbia, Manitoba and Nova Scotia have the right to directly deliver their products beyond provincial borders. That’s why the Canadian Vintners Association has gained intervenor status in a case now being deliberated by the Supreme Court of Canada. It would be considered a giant step forward into the 21st century to gain this right for Canadian wines.
China, two ways
Nowhere are the challenges of the 21st century felt more keenly than in British Columbia. Chinese investment is driving up land costs. Look for example to the Black Sage bench, the site of a new winery called Phantom Creek Estates. Slated to open in 2019, the facility will include a production and bottling area, a restaurant, sales and administration and an outdoor entertainment venue. Cost of the land and winery? $100 million.
Chinese industrialist Bai Jipin has gained a taste for Bordeaux-style wines, and sees an opportunity for a vine-to-wine vertically integrated operation. British Columbia’s reputation for Cabernet Sauvignon, Merlot and Cabernet Franc fits his vision.
Thousands of miles away, China’s growing middle class beckons. Ontario premier Kathleen Wynne led a trade mission last month that included several grape growers.
“The Canadian brand is immensely strong,” says Sue-Ann Staff, representing her own eponymous label in Jordan, Ontario. “Chinese consumers regard Canadian products as clean, pure, well-made and honest. The authenticity and traceability features are very important to their food and wine purchases.”
Staff has visited China on prior trips, but this was the first time on behalf of Sue-Ann Staff Estate Winery. Her hopes are to sell Icewine, but understands that much education will be required.
“This is a very challenging endeavour,” she says. “We need to teach the Chinese how to drink it, not to mix with gingerale. And to drink it neat. It’s feet on concrete in this marketplace.”
Contrary to the name of Icewine, it’s not served with ice. Staff is happy to be nicknamed the “Ice Queen’ if that translates well to the Chinese culture. Before their memories melt, she’ll be following up in China in March.
Karl Kaiser would have been proud of her tenacity.