Modern Technology and the Emergence of the Global Wine Trade, c. 1800–2000

Railways, Steamships, and Marketing: Modern Technology and the Emergence of the Global Wine Trade, c. 1800–2000

Introduction – The Wine Industry in 1800

The global wine industry has developed in enormous ways over the last two or so centuries. If we look back to 1800, the world wine trade was very different from what it is today. The first permanent European settlements had only recently been established in California and Australia, and wine production there was limited. Furthermore, the wine industry, such as it existed in places like South Africa, Chile, and Argentina, was largely based on a domestic subsistence market for producing cheap wine.

In Europe, things were more developed, with countries like France, Spain, and Italy already having emerged as major producers of wine, but only in France was the embryo of what might be called a national industry present, one which was regulated by the government and which shipped its product overseas to countries like Britain where it was in high demand.

Furthermore, there was no real science to wine production. Grapes were grown using traditional methods in vineyards, picked, and then crushed to ferment the by-product. Some simple methods of growing grapes in specific ways or adding extra sugar during fermentation to create sweet wines and botrytized wines were known, but there was no major science of viticulture to speak of yet. That would all change rapidly from 1800 onwards.[1]

Early Wine Innovations

Numerous innovations were already occurring in the eighteenth century, which was beginning to fundamentally alter the shape of the global wine trade in ways that have lasted down to the present day. For instance, there was a massive move from putting wine into glass bottles around this time, rather than wooden casks as it had been largely stored in since the Middle Ages.

With the advent of proto-industry in Britain, France, and other countries in the seventeenth century, businesspeople had begun scaling up their enterprises. Thus, by the mid-eighteenth century, many viticulturists in France, Spain, and other countries were expanding the size of their vineyards and their facilities for storing wine as it fermented.

Finally, the period from roughly around 1750 was when an explosion of interest in constructing canals occurred in Europe. These artificial rivers were used extensively over the next century for the movement of small ships and barges into regions previously inaccessible from the sea. Moreover, in the nineteenth century, a number of monumental canals were constructed, which would revolutionize global trade networks.[2] [Text Box 1]

The Railways

While these innovations were already in motion from the period in which the Industrial Revolution started in the 1760s and 1770s, it was not really until the nineteenth century that the global wine trade and industry were transformed. A huge part of the reason why this occurred was owing to developments that were associated with the Industrial Revolution. Of these, the foremost was the advent of the railways.

The first working railway steam locomotive was designed in Britain in 1804. Still, the first public rail system did not open until 1825, when a line between the towns of Stockport and Darlington in northern England began operating. Over the next twenty or so years, the idea of using trains on railways to transport industrial goods, commodities, and people spread slowly. But then, in the 1840s and 1850s, thousands of kilometers of railway lines began being laid down every year in countries like Britain and the United States.

By the 1870s and 1880s, railway lines connected almost every major city in the Americas and Europe and had allowed people of European descent to expand into previously unexplored parts of the world like the American West and new parts of South Africa, Chile, Argentina, and Australia. As they did so, new areas of these countries were recognized as ideal for grape cultivation and viticulture.

For instance, while wine had been produced in the famed Mendoza region of Argentina since the sixteenth century on a small scale, it was only in the late nineteenth century, when a railway line connected the region to Buenos Aires, that wine production began intensively here. Thus, the railways created the map of New World wine in the second half of the nineteenth century. In tandem with the steamship, they also allowed for the speedy transportation of large quantities of wine once it was produced.[3]

The Steam Ship’s Effect on the Wine Trade

The railways allowed for the speedier transportation of goods like wine on land, but throughout history and even today, bulky goods, such as huge crates of wine, are carried on board ships rather than on land. As such, while the advent of the railways might have, for instance, facilitated the movement of Burgundy wines to a port in northern France, from there, it was carried on board ships. And from the late 1830s, following the first trans-Atlantic journey by a purpose-built steamship, the SS Great Western, steamships proliferated around the world, above all in the Atlantic Ocean.

The effects of this on the wine industry were massive. Ships could now travel across the Atlantic in about two weeks instead of the five it had generally taken on average in the eighteenth century. Consequently, trans-Atlantic trade increased markedly, and French wine merchants began shipping more product to cities like Boston, New York, Philadelphia, Havana, and Buenos Aires.

This also brought negative effects to the global wine industry. In the mid-1850s, steamships allowed the phylloxera aphid to be transported from North America to Western Europe, where it gradually ravaged the European wine industry over the next thirty years. Eventually, phylloxera would find its way to nearly every corner of the globe. However, in the long run, the advent of the steamship opened up world markets, with Australian and New Zealand wine arriving in Britain in significant amounts by the late nineteenth century.

The Growth of Free Trade in The Wine Industry

Of course, the sheer act of transporting goods is not the only impediment that human beings have faced when it comes to trading goods like wine. There are also human impediments, notably in the shape of customs duties that one nation imposes on the importation of goods from another country. Free trade is widespread in many parts of the world today, notably across the European Union. However, that certainly was not the case in the nineteenth century, when protectionism and trade restrictions were still extensive.

As with so much else in the nineteenth century, it was Britain that led the way in the development of free trade. In 1846 the Conservative government of Robert Peel repealed the Corn Laws, which placed restrictions on the importation of cereals like corn, wheat, and barley from abroad. There was a common sense element to this. Why should the British economy be geared towards farming when it could make far more money by turning farmland into factories and simply buying the food that the country needed?[4]

This major first step in abandoning mercantilist and protectionist policies in Britain led in the 1850s to diplomatic negotiations with France to reduce customs duties and other impediments to trade between the two nations. This resulted in the Cobden-Chevalier Treaty, which was signed in 1860 and which reduced tariffs paid on the entry of goods into both nations when coming from the other. For instance, the French reduced the number of customs payable on industrial goods which it purchased from Britain, such as coal and iron, while the British reduced customs on the main items they received from France, of which a huge proportion consisted of wine and brandy.

These tentative free trade agreements set off a chain reaction, and over the next several decades, many European and American nations began negotiating similar agreements. These facilitated the development of a global wine industry in the second half of the nineteenth century and into the twentieth.

Without agreements of this kind limiting the amounts of custom paid on the entry of goods into foreign countries, it never would have been financially viable for nations like Australia and New Zealand to begin shipping their wine to Europe or the Americas. In this way, what is now known as the First Age of Globalisation, a period when the first global trade networks emerged, occurred in the period from 1870 down to the outbreak of the First World War in 1914. In the course of this 40+ year period, the global wine trade, as we know it today, emerged to a very considerable extent based on the railways, steamships, and the growth of free trade.[5]

Wine and the Birth of Marketing

Of course, free trade creates a problem or an opportunity depending on how one looks at it. It creates a much wider market and a larger range of products. Now winemakers who had produced very basic or simply bad wine in rural Germany or the mountains of Argentina and who had found willing buyers for their product in their respective regions had to improve their efforts if they were to survive in a market with growing competition. [Text Box 2]

In the case of wine marketing, we find the first major developments occurring concerning French wine and the British market. Beginning in the 1860s, the British firm W. & A. Gilbey began marketing French champagne, fine wines, and brandy to British high society. Indeed a recent study has suggested that Gilbey introduced the modern concept of a ‘range brand’ in modern marketing, predating Henry Heinz, the famous tomato ketchup baron who is typically understood to have created the concept of a ‘range brand’ in the 1880s.[6]

Whatever the merits of this argument are, the reality is that, more broadly, wine manufacturers were learning quickly how to market their product more effectively, designing labels that stated to the potential buyer where it came from and other pertinent details. The first modern wine labels made from paper were devised in France and Germany in the 1780s and 1790s, but their use did not become universal until well into the nineteenth century.[7]

Branding quickly became very important as wine is a product that can’t be tasted, smelled, or even largely seen until it is bought and opened. The methodologies used to sell it, which we all know today in terms of bottle shape, labeling, and the attempt to establish the quality and heritage of the winery which produced it, all began to evolve very quickly in the First Age of Globalisation at the end of the nineteenth century.

Scientific Innovations in Wine Production during the 19th Century

These decades also saw numerous changes in how wine was produced. In the late eighteenth century, chaptalization, a method whereby the final alcohol strength of wine is increased through the addition of more sugar to the grape juice during production, was developed in France during the second half of the eighteenth century. The early nineteenth century saw further innovations, including the first efforts at hybridization, which involved the crossing of two different Vitisspecies to grow grapes for wine production.[8]

A wealth of further scientific developments based largely on breakthroughs in chemistry and agronomy followed in the decades thereafter. These were often driven by research being carried out in Europe and the world’s first centers of enology, notably the Magarach Institute, which was opened at Yalta in the Crimea in Ukraine in 1828, and the Institut d’Oenologie founded at the University of Bordeaux in 1880.[9]

Wine Storage and Transportation in the Post-War World

The aftermath of the Second World War saw a number of further innovations in the storage and transportation of wine. As viticulture science has improved over the centuries, the optimum storing conditions have been determined, both in terms of temperature and other matters such as light, humidity, and motion. Technological breakthroughs have allowed wineries to begin building vast cellars which are designed for optimum storage of large quantities of wine. The same techniques can be applied to shipping containers and other forms of transport when wine is being carried in bulk from somewhere like New Zealand to Britain on the other side of the world.

Such optimum storage conditions are necessary in a world where huge amounts of goods are still transported by sea on freight containers and then onwards on articulated trucks or on railway lines. However, further post-war innovation has allowed for some wines to be transported across the world in a matter of hours. This was the development of the airplane.[10]

Prior to the Second World War, planes could only fly bursts of a few hundred miles at a time, generally speaking, before they had to land to refuel, but the first commercial trans-Atlantic flights were completed before the war broke out in 1939. In the 1950s and 1960s, intercontinental commercial air flight became widespread. What many tourists and business travelers are often unaware of today is that their British Airways or American Airlines planes usually have commercial cargo stored in the hold along with their suitcases.

That could be wine from time to time, making its way from California to London at a rate that would have been absolutely unimaginable to a vintner in Napa Valley a hundred years ago. Vast quantities of it can be carried on planes designed exclusively to transport commercial cargo.[11]

Twentieth-Century Marketing, Supermarkets, and Wine Merchants

The twentieth century also saw a number of new innovations in the way wine is marketed and sold. Some of these changes have been perhaps less desirable than others. One thinks of the idea of wine-in-a-box here, a peculiar cultural phenomenon that has curiously survived, even if only in a limited fashion, following its first widespread marketing in the 1980s. However, other aspects have caught on in more tangible ways and have genuinely benefited the wine industry and the distribution of better quality wines, notably the rise of wine clubs since the 1970s.[12] [Text Box 3]

However, of all the developments in modern marketing concerning wine which has transformed the way in which it is sold and the quantity of it which is consumed in many countries, then the clearest development is the decision by supermarkets and large stores to start stocking large quantities of wine in the second half of the twentieth century.

In many countries, the wine trade had previously been viewed as something which should be the reserve of wine merchants and traders with substantive knowledge about the product they were selling. This often limited both the availability of wine in many countries and cities and the market for what was seen as an alcoholic beverage for a certain social class. Today it is available on the shelves of most supermarkets and shops in scores of countries worldwide, leading to what one might call the democratization of wine consumption in the western world and further afield.

The end result of this has been that the map of wine consumption worldwide has evened out more. For instance, in 1960, nearly 60% of all wine produced worldwide was consumed in France, Italy, and Spain. In a great many other countries, wine only had a limited market, if any at all. For instance, in some poorer European countries like Ireland or Poland, there was a tiny market for wine in the post-war period. That all changed as a result of different marketing and selling methods, and today the three nations of France, Italy, and Spain only account for just over 20% of all of the wine consumed globally, a huge shift in the space of half a century.[13]

The Modern Wine Industry

The modern wine industry, which we know it today, was effectively forged in the nineteenth and twentieth centuries as industrialization and globalization emerged and spread worldwide. The result has been the transformation of viticulture from something which had its roots firmly in Europe to a global phenomenon. Today, for instance, the biggest emerging or growing wine markets in the world are in China and Africa, two major world regions throughout which grape wine was largely unheard of as recently as a century and a half ago.

This is not to say that the global wine market, which has emerged as a result of modernization since 1800, will not evolve further. New wine-making methods and concepts are emerging all the time. For instance, micro-oxygenation, whereby controlled amounts of oxygen are introduced into a wine to artificially accelerate the aging process, was only invented in the early 1990s and is still evolving today.

Other innovations which we can expect to see in years to come include using the by-products from wine production to make biofuels. Perhaps the most striking vista ahead, though, concerns the use of DNA profiling and analysis so that winemakers can examine yeast strains in real-time during the fermentation process and use the information gathered to alter the end product on a previously unimaginable micro-scale. Thus, the processes which have created the modern wine industry through marketing, innovation, industrialization, and globalization over the past 200 years are still evolving and will continue to lead in new directions in the years to come.[14]

Going Deeper – In-Depth Snippets on Innovation and Wine Trade

Wine and the Canals

The role of the world’s great canals in facilitating the global wine trade since the mid-eighteenth century cannot be understated.

In an age before the railways and automobiles, the seas and rivers were where one needed to go to travel quickly with bulky goods. The wind was your best friend thereafter, and it was through this means that Spanish, Portuguese, and French wines were traded all over Western and Northern Europe from the Middle Ages onwards. But transport of wine to inland places and particular towns and cities which lay on rivers and which were not easily navigable by large ships remained difficult.

From the mid-eighteenth century, this all changed as engineers and governments began constructing artificial rivers in the interior of countries like England, Scotland, Ireland, Germany, and Poland. Now wine could be shipped in large amounts inland on barges and boats. And this was just the beginning.

In the nineteenth century, the scale on which canals were constructed expanded massively. In 1869 the Suez Canal was opened, allowing for the shipment of wine from Australia or New Zealand to Europe in half the time previously needed by going around the African continent. A quarter of a century later, the Kiel Canal was constructed across northern Germany near the Danish border, effectively ending the need to sail around Denmark and through the Baltic Sound.

Now French wine merchants could ship their goods to Stockholm, Danzig, or St Petersburg much more efficiently. Finally, the opening of the Panama Canal in 1914 would allow for the passage of huge amounts of Old World wine westwards to a burgeoning Hollywood and its growing riches, while California wine would pass in the opposite direction.[15]

The Emergence of Modern Marketing Techniques

Marketing was effectively invented in the nineteenth century during the rapid urbanization of countries like England and the United States as a means of convincing people that the product a tradesperson was selling was reliable and safe.

For centuries people lived in villages and small towns, and if you wanted to buy something like a loaf of bread, you went and bought it from your local baker. This was a comfortable process. You knew who the baker was and that you could trust them. However, the advent of industrialization and the growth of large cities led to a situation where people didn’t know each other anymore. Now some bakers felt that they needed to convince their customers that they were both an honest tradesperson and that they weren’t one of those crooked bakers that abounded in the nineteenth century and who, believe it or not, bulked out their flour with cheap sawdust. So they put labels on their bread that sounded folksy and trustworthy, something like ‘Uncle Bob’s Batch’ or ‘Aunt Bessie’s Bread’.

These marketing techniques were soon mirrored in how wine was sold. However, because wine was viewed as a more prestigious product than a humble loaf of bread, the tendency developed to try and establish that the winery which was producing it was longstanding and using traditional methods of wine production which should be valued.[16]

The Wine of the Month Club

One of the most famous wine clubs of them all, the US Wine of the Month Club, was established way back in 1972 by Paul Kalemkiarian Snr., a chemist from California.

Kalemkiarian started out running a chain of pharmacies in the 1960s, but in the course of one transaction to acquire a pharmacy, he also came into possession of Palos Verdes Wine and Spirits. In 1972 he then began selecting a bottle of red wine and a bottle of white as his wine of the month in the store. The idea was that these were good quality wines that could be purchased for five dollars or less.

Initially, this was only an instore idea, but it proved so popular that Kalemkiarian soon began mailing his customers the wine of the month rather than them having to visit the store.

Thus was born the Wine of the Month Club. Today the company is still run by Kalemkiarian’s son and namesake. It is one of the largest wine clubs in the world, inspiring many imitators in a great many different jurisdictions since.[17]

Also read: 

• Algerian Wine Era, its Global Impact, and Wine History (Part II)
• The French Wine

Further Reading:

Paul Duguid, ‘Developing the Brand: The Case of Alcohol, 1800–1880’, in Enterprise & Society, Vol. 4, No. 3 (September, 2003), pp. 405–441.

Graham Harding, ‘“The magic of brand”: The 19th century British wine trade and development of branding’, in Marketing and Social Change: Making History and Culture, Vol. 20 (2021).

David Hayward and Nick Lewis, ‘Regional Dynamics in the Globalising Wine Industry’, in The Geographical Journal, Vol. 174, No. 2: Value Chains and the Geographies of Wine Production and Consumption (June, 2008), pp. 124–137.

A. A. Iliasu, ‘The Cobden-Chevalier Commerical Treaty of 1860’, in The Historical Journal, Vol. 14, No. 1 (March, 1971), pp. 67–98.

Jancis Robinson, The Oxford Companion to Wine (Third Edition, Oxford, 2006).

James Simpson, Creating Wine: The Emergence of a World Industry, 1840–1914 (Princeton, 2011)

On this Day

15 September 1859 – On this day in 1859, Isambard Kingdom Brunel, one of the greatest figures in the history of engineering and a prolific inventor of the British Industrial Revolution, passed away in London. He was known for many innovations and theoretical designs, notably the plan for an underwater tunnel below the River Thames in London. He also built several ships, which revolutionized naval travel. The first of these was the SS Great Western, the first steamship which was purpose-built for undertaking trans-Atlantic travel. Following its maiden voyage in 1838, the Great Westernand the ships which followed it transformed marine travel. With steamship technology now powering ships, as opposed to them largely being powered by wind, the average ship could now cross the Atlantic Ocean in between one and two weeks, rather than several weeks as it had previously taken. The advent of Brunel’s steamship was pivotal in developing a global wine industry. It now became much more plausible for French winemakers to ship their product to the United States and for Californian, Argentinian, Chilean, South African, and Australian vintners to find a market back in Europe. In time a globalized wine industry would begin to emerge as the steamship, and other innovations like the railways made the world a smaller place that could be traversed and through which wine could be traded much more efficiently.[18]

23 January 1860 – On this day in 1860, the Cobden-Chevalier Treaty was signed between the governments of Britain and France. This was a keystone event in the development of free trade between nation states in the modern period. Named after the two main individuals who negotiated it, Richard Cobden, a British MP, and Michael Chevalier, a French economist, the agreement aimed to reduce tariffs that were paid on the entry of goods into both nations when coming from the other. For instance, the French reduced the number of customs payable on industrial goods such as coal and iron coming from Britain, while the British reduced customs on the main items they received from France. These were resoundingly centered on wine and brandy, which had made up a huge part of Anglo-French trade since the Middle Ages. Over a century and a half later, free trade arrangements had been entered into of a similar kind all over the world by nation-states. These have significantly reduced the impediments to the development of global trade in wine. Without them, it would never have become feasible for people in Europe, for instance, to develop a taste for New Zealand white wine. It simply would have made practical economic sense for nations within Europe to continue consuming wine made in France, Italy, or Spain.[19]

15 August 1914 – On this day in 1914, the Panama Canal opened for business after decades of false starts and failed efforts to build a route-way through Central America connecting the Atlantic Ocean to the Pacific Ocean. For over a century prior to this, anyone wishing to travel from the western parts of countries like the United States and Mexico to the Atlantic Ocean with large amounts of goods like wine had to sail around Cape Horn and Tierra del Fuego at the southern end of South America. The canal changed all of that. What this meant, in theory, is that a California winemaker could not ship his product to France by covering less than half the distance the wine had to traverse on a boat throughout the nineteenth century. This revolutionized the traffic of all manner of goods, wine included, between the Atlantic and the Pacific Ocean. In the century since it opened, over one million ships have utilized the canal, many carrying hundreds or even thousands of freight containers. How many of these, one wonders, contained California wine bound for Europe or vice-versa?[20]

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References

[1] Pierre Jean-Baptiste Le Grand d’Aussy, A History of Wine in France: From the Gauls to the Eighteenth Century, translated by Him Chevallier (London, 2014).

[2] https://canalrivertrust.org.uk/enjoy-the-waterways/canal-history/the-first-canal-age-canal-history [accessed 7/8/22].

[3] Richard J. Orsi, ‘Railroads and the History of California and the Far West: An Introduction’, in California History, Vol. 70, No. 1 (Spring, 1991), pp. 2–11; James Simpson, Creating Wine: The Emergence of a World Industry, 1840–1914 (Princeton, 2011).

[4] Douglas Irwin and Maksym Cheleliev, ‘The economic consequences of Sir Robert Peel: A quantitative assessment of the repeal of the Corn Laws’, NBER Working Paper (November, 2020).

[5] https://www.historyandpolicy.org/policy-papers/papers/wine-supermarkets-and-alcohol-policy [accessed 6/8/22]; A. A. Iliasu, ‘The Cobden-Chevalier Commerical Treaty of 1860’, in The Historical Journal, Vol. 14, No. 1 (March, 1971), pp. 67–98.

[6] Graham Harding, ‘“The magic of brand”: The 19th century British wine trade and development of branding’, in Marketing and Social Change: Making History and Culture, Vol. 20 (2021).

[7] https://www.premierlabels.uk.com/news/a-brief-history-of-wine-labels [accessed 7/8/22].

[8] J. B. Gough, ‘Winecraft and Chemistry in 18th Century France: Chaptal and the Invention of Chaptalization’, in Technology and Culture, Vol. 39, No.1 (Jan 1998); ‘Chaptal, Jean-Antoine’, in Jancis Robinson, The Oxford Companion to Wine (Third Edition, Oxford, 2006).

[9] ‘academe’, in Jancis Robinson, The Oxford Companion to Wine (Third Edition, Oxford, 2006).

[10] ‘Storing wine’, in Jancis Robinson, The Oxford Companion to Wine (Third Edition, Oxford, 2006).

[11] https://www.reedsmith.com/en/perspectives/global-air-freight/2022/01/carrying-the-load-use-of-passenger-aircraft-to-haul-cargo-during-covid19 [accessed 7/8/22]; Kym Anderson, Signe Nelgen and Vicente Pinilla, Global wine markets, 1860 to 2016: A statistical compendium (Adelaide, 2017); David Hayward and Nick Lewis, ‘Regional Dynamics in the Globalising Wine Industry’, in The Geographical Journal, Vol. 174, No. 2: Value Chains and the Geographies of Wine Production and Consumption (June, 2008), pp. 124–137.

[12] Sarah Dukes, ‘The original wine of the month club? Only a bottle away in Monrovia’, Wineclubs.net, 31 January 2019.

[13] https://vinepair.com/wine-blog/countries-drank-most-wine-animated-gif-map/ [accessed 7/8/22].

[14] https://www.winemag.com/2019/04/02/science-and-the-future-of-winemaking/ [accessed 8/8/22].

[15] Max E. Fletcher, ‘The Suez Canal and World Shipping, 1869–1914’, in The Journal of Economic History, Vol. 18, No. 4 (December, 1958), pp. 556–573; C. J. Merdinger, ‘Canals through the Ages’, in The Military Engineer, Vol. 49, No. 332 (November – December, 1957), pp. 453–458.

[16] Nicholas Alexander and Gary Akehurst. ‘Introduction: the Emergence of Modern Retailing Business, 1750–1950’, in Business History, Vol. 40 (October, 1998), pp. 1–15; Paul Duguid, ‘Developing the Brand: The Case of Alcohol, 1800–1880’, in Enterprise & Society, Vol. 4, No. 3 (September, 2003), pp. 405–441.

[17] Sarah Dukes, ‘The original wine of the month club? Only a bottle away in Monrovia’, Wineclubs.net, 31 January 2019.

[18] Sir Alfred Pugsley (ed.), The Works of Isambard Kingdom Brunel (London, 1976); David Waller, ‘It was surely Brunel’s SS Great Western that changed ocean travel’, The Financial Times, 7 August 2015.

[19] https://www.historyandpolicy.org/policy-papers/papers/wine-supermarkets-and-alcohol-policy [accessed 6/8/22]; A. A. Iliasu, ‘The Cobden-Chevalier Commerical Treaty of 1860’, in The Historical Journal, Vol. 14, No. 1 (March, 1971), pp. 67–98.

[20] John Major, Prize Possession: The United States and the Panama Canal, 1903–1979 (London, 1993); Julie Greene, The Canal Builders: Making America’s Empire at the Panama Canal (New York, 2009).